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Investing.com - Stifel has raised its price target on McDonald’s (NYSE:MCD) to $315.00 from $300.00 while maintaining a Hold rating on the stock. The fast-food giant, currently trading at $313.22 and near its 52-week high, has analyst targets ranging from $260 to $373.
The price target adjustment follows reports that McDonald’s has reached an agreement with franchisees to lower prices on several combo meals, including the Quarter Pounder and Big Mac, in an effort to improve its value perception among consumers. The company, with its robust $26.06 billion in revenue and healthy 57% gross margin, appears well-positioned to absorb these pricing adjustments.
The fast-food chain plans to implement a more aggressive promotional strategy in the second half of 2025, which will include BTS Happy Meals and limited-time combo meal offers to drive customer awareness of the new pricing structure.
Stifel noted that assessing the impact of these price changes remains complex due to regional price variations and differing consumer perceptions across markets. Basic pricing estimates suggest combo meals priced at $10 could drop to around $8.50, representing a shift from the current 10-11% average discount to approximately 15%.
The research firm has adopted a more constructive view on McDonald’s but maintains its Hold rating until more details emerge about the implementation and consumer response to the new pricing strategy. The company currently trades at a P/E ratio of 26.71, reflecting market confidence in its strategic initiatives.
In other recent news, McDonald’s has announced plans to implement significant price reductions on its popular combo meals. The fast-food giant and its franchisees have agreed to maintain combo meal prices at 15% below the cost of purchasing items individually, enhancing the perceived value for customers. This move represents a deeper discount compared to the current 10-11% average, as noted by Raymond (NSE:RYMD) James research. The new pricing strategy will also include limited-time $5 breakfast combos and $8 combos featuring choices like the Big Mac or 10-piece McNuggets. These changes are reportedly set to begin in early September. TD Cowen has reiterated its Hold rating on McDonald’s, maintaining a price target of $315.00. Analyst Andrew Charles from TD Cowen highlighted the strategic value pricing as a key factor in their assessment. The adjustments are part of McDonald’s broader strategy to enhance value perceptions among consumers.
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