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Investing.com - Guggenheim raised its price target on McDonald’s (NYSE:MCD) to $310.00 from $295.00 on Wednesday, while maintaining a Neutral rating on the stock. The new target sits slightly above McDonald’s current trading price of $304.59 and aligns closely with InvestingPro’s Fair Value assessment, which suggests the stock is fairly priced at current levels.
The firm cited McDonald’s "reasonably strong" same-store sales in the United States despite challenging industry conditions, particularly as the company faces easier year-over-year comparisons following E. Coli issues in the fourth quarter of 2024.
Guggenheim expects McDonald’s to increase its focus on coffee, energy drinks, and chicken offerings in 2026 as part of its strategy to maintain sales momentum.
The price target increase reflects Guggenheim’s decision to raise its price-to-earnings multiple on 2026 estimated earnings per share to 23.5x from 22.5x. McDonald’s currently trades at a P/E ratio of 26, which InvestingPro data shows is high relative to its growth rate, with a PEG ratio of 8.88.
Guggenheim justified the higher multiple by noting that investors are likely to favor defensive businesses amid a "more challenged top-line backdrop," which could provide support for McDonald’s shares. This defensive positioning is supported by the stock’s low beta of 0.52 and McDonald’s impressive 50-year history of consecutive dividend increases, making it attractive for income-focused investors seeking stability.
In other recent news, McDonald’s reported its third-quarter 2025 earnings, revealing an adjusted earnings per share (EPS) of $3.22, which fell short of the consensus estimate of $3.33. Revenue also missed expectations, coming in at $7.08 billion compared to the anticipated $7.10 billion. Despite these shortfalls, several analyst firms maintained positive outlooks on McDonald’s stock. Truist Securities reiterated its Buy rating with a $350.00 price target, noting the company beat adjusted EBITDA expectations. BMO Capital also maintained its Outperform rating with a $360.00 price target, attributing the earnings miss to non-operating income and interest expenses. KeyBanc Capital Markets kept its Overweight rating, highlighting strong execution despite the earnings miss. Bernstein SocGen Group reiterated a Market Perform rating, citing a "good setup into 2026" with expected strength in the US market. These developments reflect a mixed but generally optimistic view from analysts on McDonald’s strategic position and future prospects.
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