Street Calls of the Week
Investing.com - Guggenheim has reduced its price target on McDonald’s (NYSE:MCD) to $295.00 from $310.00 while maintaining its Neutral rating on the stock. The fast-food giant, currently trading at $293.81 with a market capitalization of $209.66 billion, has seen its stock trading near its 52-week low, according to InvestingPro data.
The price target reduction reflects Guggenheim’s decision to trim its multiple to 22.5x 2026 EPS from 23x, citing softer restaurant industry trends as the primary reason for the adjustment.
Guggenheim has also lowered its earnings per share estimates for McDonald’s, reducing both 2025 and 2026 EPS projections by $0.25 to $12.20 and $13.25, respectively, compared to consensus estimates of $12.34 and $13.35.
The firm noted that the third-quarter exit rate for restaurant sector trends fell significantly below investor expectations, raising substantial questions about 2026 algorithms as some executive teams prepare to issue guidance for the upcoming year.
Guggenheim emphasized that the challenging trend environment appears to be "broad-based rather than a McDonald’s-specific issue," suggesting industry-wide headwinds rather than company-specific problems.
In other recent news, McDonald’s has been the focus of several analyst updates. RBC Capital initiated coverage with a Sector Perform rating and a price target of $320, expressing caution about the company’s emphasis on value offerings amid lower-income consumer spending pressures. Jefferies maintained its Buy rating with a $360 price target but lowered its third-quarter same-store sales estimate for U.S. operations to 2.5%, expecting earnings per share to be slightly below consensus estimates. KeyBanc reiterated an Overweight rating, projecting U.S. same-store sales growth at +2.5% for the third quarter, aligning with market forecasts. Bernstein raised its price target from $310 to $320, maintaining a Market Perform rating, and noted McDonald’s potential to outpace competitors with its Extra Value Meals. Meanwhile, Dollar Tree continues to face tariff pressures, with Telsey Advisory Group maintaining an Outperform rating and a $130 price target, despite back-to-school sales falling short of expectations.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.