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Investing.com - McDonald’s (NYSE:MCD), the $220 billion market cap restaurant giant with a GOOD financial health score according to InvestingPro, received a reiterated Hold rating and $300 price target from Stifel on Thursday, following the fast-food giant’s second-quarter 2025 results.
The company reported U.S. comparable sales growth of 2.5% in the quarter, which Stifel believes aligned with investor expectations. McDonald’s U.S. growth came from higher average check values while traffic remained negative, indicating ongoing value perception challenges stemming from previous pricing actions.
International performance exceeded market expectations, with International Operated Markets posting a 4.0% increase compared to Street estimates of 1.8%. International Developmental Licensed Markets delivered even stronger results with 5.6% growth against expectations of 3.8%.
The international strength was broad-based, with Japan and Europe leading the way as value platforms and menu innovation resonated with consumers in those markets. McDonald’s efforts to address value perception through offerings like the $2.99 Snack Wrap and $5 Meal Deal are ongoing.
Stifel views McDonald’s shares as likely range-bound, citing a reasonable valuation at approximately 24 times forward price-to-earnings and limited earnings upside potential. The firm expects McDonald’s value-focused initiatives and core menu changes may result in volatile comparable sales performance. InvestingPro analysis suggests the stock is slightly overvalued at current levels, though it maintains a 49-year streak of dividend increases with a current yield of 2.3%. Discover more insights and 8 additional ProTips with an InvestingPro subscription.
In other recent news, McDonald’s reported impressive financial results for the second quarter of 2025. The company surpassed analysts’ expectations with an adjusted earnings per share of $3.19, higher than the forecasted $3.15. Additionally, McDonald’s revenue exceeded projections, reaching $6.84 billion against an expected $6.7 billion. Following these strong results, BMO Capital raised its price target for McDonald’s to $350 from $345, maintaining an Outperform rating. Bernstein SocGen also increased its price target to $310 from $300, citing a strong marketing calendar and cleaner earnings visibility. Meanwhile, Raymond (NSE:RYMD) James reiterated its Market Perform rating, noting solid international trends despite a decline in visits from lower-income U.S. consumers. These developments highlight McDonald’s ability to perform well amid a challenging quick-service restaurant environment.
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