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Investing.com - McDonald’s (NYSE:MCD), the $219 billion market cap restaurant giant with a GOOD financial health rating according to InvestingPro, is testing specialty beverages in approximately 500 existing locations in Colorado and Wisconsin, according to Piper Sandler, which maintained its Neutral rating and $325.00 price target on the stock.
The fast-food giant’s test offerings include cold coffees, refreshers, crafted sodas, and energy drinks, following its initial exploration of the specialty beverage market through standalone CosMc’s locations. With a robust 57% gross profit margin and $26 billion in annual revenue, McDonald’s continues to demonstrate its market leadership in the Hotels, Restaurants & Leisure industry.
Piper Sandler conducted price comparison research between McDonald’s test beverages and competitors in both test markets, finding that McDonald’s offerings are consistently priced lower than specialty beverage chains.
In Colorado, McDonald’s test beverages are priced at a discount compared to Dutch Bros (NYSE:BROS) offerings, while in Wisconsin, the company’s drinks are less expensive than those from privately-held Scooter’s.
The research firm noted that the price difference was particularly significant for energy drink offerings, where McDonald’s maintained the most notable discount compared to competitors in both markets. For deeper insights into McDonald’s competitive positioning and detailed financial analysis, including 12 additional exclusive ProTips, visit InvestingPro’s comprehensive research report.
In other recent news, McDonald’s has been the subject of several analyst reports, highlighting various perspectives on its financial outlook. KeyBanc Capital Markets reiterated its Overweight rating on McDonald’s, maintaining a price target of $335.00, citing moderated investor expectations and anticipated improvements in fourth-quarter results. Conversely, TD Cowen lowered its price target to $320.00 from $330.00 due to weaker-than-expected U.S. same-store sales, adjusting its third-quarter forecast to 2% from 3%. Guggenheim also reduced its price target to $295.00, attributing the change to softer restaurant industry trends and adjusting its valuation multiple. RBC Capital initiated coverage with a Sector Perform rating and a $320.00 price target, expressing caution about McDonald’s value offerings and the potential challenges from lower-income consumer spending pressures. Meanwhile, Jefferies maintained a Buy rating with a $360.00 price target, although it adjusted its third-quarter U.S. same-store sales estimate to 2.5% from 3%. These developments reflect a range of analyst expectations regarding McDonald’s performance and strategic initiatives.
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