McDonald’s stock price target raised to $320 from $310 at Bernstein

Investing.com - Bernstein SocGen Group raised its price target on McDonald’s (NYSE:MCD) to $320.00 from $310.00 on Monday, while maintaining a Market Perform rating on the fast-food giant’s shares. According to InvestingPro data, McDonald’s, with its substantial $218 billion market capitalization, currently trades near its Fair Value, showing a beta of just 0.49, indicating lower volatility than the broader market.

The firm expects McDonald’s to outpace competitors in the near term following the launch of Extra Value Meals, noting that competitors may be unwilling or unable to match McDonald’s in a "value war." Bernstein believes McDonald’s message of lowering prices while others raise them will resonate with consumers and potentially bring positive publicity to the quick-service restaurant industry. The company’s strong financial position, evidenced by its GOOD overall health score on InvestingPro and impressive 57% gross profit margin, provides flexibility for such competitive pricing strategies.

Bernstein’s analysis suggests the Extra Value Meals initiative will lead to marginally higher same-store sales growth in the near term, though potentially not enough to maintain franchisee profitability at current levels. The firm estimates franchisees would need a permanent traffic uplift of at least 1.64% to offset an estimated ticket drag of -0.76%, resulting in a net same-store sales growth lift of 0.86%.

The increased price target reflects Bernstein’s expectations that traffic and beverage attachment could increase over time, given McDonald’s extensive store network and strong food platform. The firm specifically highlighted the rollout of specialty beverages as a potentially meaningful margin and traffic-accretive opportunity for McDonald’s in the longer term.

Despite the price target increase, Bernstein remains cautious, expressing concern that excessive limited-time offers focused on core items might bring short-term relief but risk diluting brand equity in the long term. The firm also noted it remains vigilant about potential operational bottlenecks that specialty beverages may create. InvestingPro analysis reveals McDonald’s has maintained dividend payments for 50 consecutive years and currently offers a 2.32% yield, demonstrating long-term financial stability despite market challenges. For deeper insights into McDonald’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

In other recent news, Dollar Tree is navigating increased tariff pressures, with Telsey Advisory Group maintaining an Outperform rating and a price target of $130. The company reported that its back-to-school sales were at the lower end of expectations but anticipates improvement during the fall and winter holidays in the second half of 2025. Meanwhile, McDonald’s has seen several analyst updates following a strategic dinner with its executives. BMO Capital raised its price target for McDonald’s to $360, citing the company’s leadership in value offerings. Truist Securities also reiterated a Buy rating with a $360 price target, expressing confidence in McDonald’s value strategy and market share growth. Conversely, Stifel and TD Cowen both maintained a Hold rating on McDonald’s, with price targets of $315 and $330, respectively, amid discussions about the company’s value menu initiatives. These developments highlight the ongoing strategic adjustments and market evaluations for both Dollar Tree and McDonald’s.

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