McDonald's share weakness a buying opportunity as sales acceleration, global expansion support outlook

Jefferies analysts see recent weakness in McDonald's (MCD) shares as a buying opportunity, maintaining a 'Buy' rating and a $360 price target, representing a 19% upside. The firm anticipates near-term same-store sales acceleration, projecting 4% US growth for Q2 driven by promotions like the Minecraft movie tie-in and new menu items, outpacing the 2.5% consensus. They also foresee medium-term unit growth and believe McDonald's valuation, currently at 16.5x 2026 EV/EBITDA, has room to expand towards the 18x multiple of peers like Yum Brands and Domino's, supported by strong international performance and efficient operations.

Analysis

Jefferies analysts identify McDonald's Corp. (MCD) recent share price decline as a compelling buying opportunity, reiterating a 'Buy' rating and a $360 price target, which suggests a 19% upside from its approximate $303 closing price on June 12, 2025. The positive outlook is underpinned by expectations of near-term same-store sales acceleration and medium-term global unit expansion. Jefferies projects a 4% U.S. same-store sales growth for McDonald's in the second quarter, significantly above the Street consensus of 2.5%, driven by strategic initiatives such as the Minecraft movie promotion, the $5 meal deal, and a pipeline of new product introductions including McCrispy Strips (launched May 5), S’mores McFlurry (launched June 10), and the returning chicken Snack Wrap (July 10). The firm highlights McDonald's current valuation at 16.5x 2026 enterprise value to EBITDA (EV/EBITDA), which trails peers like Yum Brands and Domino’s Pizza, trading at approximately 18x EV/EBITDA, suggesting potential for multiple expansion towards Jefferies' target basis of 18.5x. Despite a soft first quarter and ongoing pressures on lower-income consumers, McDonald's is reportedly managing effectively by balancing value propositions, product innovation, and marketing. Further optimism stems from strong international performance, agile global marketing, enduring brand advantages in scale and supply chain, and modernized store infrastructure. Jefferies anticipates mid- to high-single-digit revenue and operating profit growth, translating into double-digit earnings growth, supported by robust free cash flow generation and high operating margins.

Key Decisions for Investors

• Investors could consider the recent weakness in McDonald's shares as a potential entry point, given Jefferies' 'Buy' rating and 19% upside to their $360 price target.
• Monitor McDonald's second-quarter U.S. same-store sales figures closely, as outperformance relative to the 2.5% consensus, towards Jefferies' 4% projection, would validate the near-term growth thesis.
• Evaluate the market reception and sales impact of new menu items like McCrispy Strips and the returning chicken Snack Wrap, as these are key components of the anticipated sales acceleration.
• Assess the valuation differential between McDonald's and its peers (Yum Brands, Domino's Pizza) for potential multiple re-rating catalysts as the company executes on its growth and operational strategies.