Loop Capital maintains Buy on McDonald’s stock with $346 target

Published 16/05/2025, 13:02
© Reuters.

On Friday, Loop Capital reiterated its Buy rating on McDonald’s Corporation (NYSE:MCD) with a steadfast price target of $346.00. The fast-food giant, currently valued at $225 billion, has demonstrated strong financial health according to InvestingPro analysis, with 17 analysts recently revising their earnings expectations upward for the upcoming period. The firm’s recent checks with U.S. franchisees of the fast-food giant revealed that same-store sales have shown a positive trend in the second quarter to date, with an increase of 2.0-2.5%. This performance is in line with Loop Capital’s projection for the full quarter, though slightly trailing the consensus estimate of a 2.7% rise. The company’s stock is currently trading near its 52-week high of $326.32, reflecting investor confidence in its performance.

Analysts at Loop Capital have gathered data indicating that McDonald’s could see an uptick in sales growth for the remainder of the quarter, bolstered by the recent launch of chicken strips and the anticipated introduction of snack wraps. The current quarter-to-date same-store sales growth translates to a 1.3-1.8% increase on a two-year stacked basis, which is an improvement over the 1.1% two-year stacked decline reported in the first quarter of 2025.

Furthermore, the implied three-year stacks to date in the second quarter are between 11.6-12.1%, a slight acceleration from the 11.5% reported by McDonald’s in the first quarter. This data suggests a continued, albeit modest, recovery in sales performance when compared to the past few years.

Loop Capital’s analysis supports the firm’s confidence in McDonald’s, maintaining a Buy rating based on approximately 19.5 times their 2025 enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) estimate. The firm’s position remains unchanged as they continue to monitor McDonald’s performance closely, particularly as new menu items are expected to contribute to sales growth in the near term. With a consistent dividend growth record spanning 49 years and a current yield of 2.25%, McDonald’s remains an attractive option for income investors. For deeper insights into McDonald’s financial metrics and growth potential, including exclusive ProTips and comprehensive analysis, check out the detailed research available on InvestingPro.

In other recent news, McDonald’s Corporation reported its first-quarter 2025 earnings, which fell short of analysts’ expectations. The company posted an adjusted earnings per share (EPS) of $2.67, slightly below the forecasted $2.69, and generated revenue of $5.96 billion, missing the anticipated $6.15 billion. Despite these figures, McDonald’s maintained strong restaurant margins and emphasized operational efficiency, which were noted as highlights. UBS maintained a Buy rating with a $350 price target, citing McDonald’s strategic initiatives and potential market share gains. Stifel, however, kept a Hold rating with a $300 target, pointing out weaker-than-expected U.S. and International Operated Markets comparable sales. Meanwhile, JPMorgan raised its price target from $300 to $305, maintaining an Overweight rating, and expressed optimism about McDonald’s ability to navigate sales pressures. The company plans to focus on value, affordability, and menu innovation to drive growth, with upcoming product launches like McCrispy Chicken Strips and Snack Wraps. These developments reflect the company’s ongoing efforts to adapt to challenging market conditions and enhance its competitive position.

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