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Investing.com - KeyBanc lowered its price target on McDonald’s (NYSE:MCD) to $325 from $340 while maintaining an Overweight rating on the stock. According to InvestingPro data, the stock currently trades near its Fair Value, with analysts’ targets ranging from $260 to $364 and a consensus recommendation of 2.22 (Buy).
The firm cited a highly competitive second quarter for the fast food hamburger industry, as consumers managed spending levels and sought better value for money. Despite market challenges, McDonald’s maintains a GOOD financial health score and has demonstrated remarkable dividend consistency, raising payments for 49 consecutive years.
KeyBanc believes McDonald’s U.S. system likely outperformed its two largest rivals during the second quarter, though the absolute growth level was "perhaps not to the extent previously imagined."
The analyst trimmed the full-year same-store sales growth estimate for McDonald’s U.S. from 1.7% to 1.1% and reduced the 2025 earnings per share forecast to $12.40 from $12.54.
Despite these adjustments, KeyBanc maintained its Overweight rating, expressing confidence in McDonald’s ability to drive market share gains over the long term.
In other recent news, McDonald’s has reached a settlement in a $10 billion lawsuit with media entrepreneur Byron Allen. The lawsuit, which was resolved before going to trial, involved allegations that McDonald’s refused to advertise with Black-owned media companies. As part of the settlement, McDonald’s will purchase advertisements from Allen’s companies at market value, although the specific terms remain confidential. Additionally, McDonald’s and Krispy Kreme (NASDAQ:DNUT) have decided to end their partnership, effective July 2, 2025, as it was not financially viable for Krispy Kreme despite meeting McDonald’s expectations. This partnership involved about 2,400 McDonald’s restaurants and was a small part of McDonald’s breakfast business.
In terms of stock ratings, UBS has reiterated its Buy rating for McDonald’s, maintaining a $350 price target, and highlighting the company’s potential for multiyear market share gains. UBS expects improvements in McDonald’s same-store sales and international performance in the coming quarters. Jefferies also maintained a Buy rating with a $360 price target, citing McDonald’s defensive qualities and strong operating margins. The firm projects McDonald’s will achieve mid-single to high-single-digit revenue growth and low-double-digit earnings growth. These developments reflect a positive outlook for McDonald’s despite current market challenges.
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