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On Tuesday, UBS restated its confidence in McDonald’s Corporation (NYSE:MCD), maintaining a Buy rating and a $350.00 price target. According to InvestingPro data, 17 analysts have recently revised their earnings estimates upward, with the stock trading near its 52-week high of $326.32. The firm’s analysis acknowledged that McDonald’s faced global macroeconomic challenges and industry pressures during the first quarter. Despite these hurdles, the company’s strategic initiatives are expected to boost performance in the coming quarters.
McDonald’s first-quarter results indicated that these three months could represent the lowest point in global sales, with projections for stronger trends throughout the year. The company, with its substantial market capitalization of $225.75 billion and defensive beta of 0.57, continues to demonstrate resilience. UBS anticipates McDonald’s will capture market share in key regions. In the United States, consumer spending has been constrained, particularly among lower-income groups, where quick-service restaurant (QSR) industry traffic has fallen sharply. This trend has also started to affect middle-income consumers, although spending by higher-income groups remains robust.
UBS finds encouragement in McDonald’s ability to outperform its industry peers in terms of guest counts, both in the U.S. and internationally. Initiatives such as the McValue platform, high guest satisfaction scores, and fresh marketing and product introductions are expected to hasten growth in the U.S. market over the next few quarters.
Looking ahead to 2025, UBS views McDonald’s position as promising, with potential to drive market share gains and bolster U.S. sales growth. The firm also notes McDonald’s defensive qualities, which could offer stability in an otherwise volatile economic landscape.
In other recent news, McDonald’s Corporation reported its first-quarter 2025 earnings, which fell short of analysts’ expectations. The company posted an adjusted earnings per share of $2.67, missing the forecasted $2.69, and reported revenue of $5.96 billion, below the expected $6.15 billion. Despite these challenges, McDonald’s maintained strong restaurant margins and expressed optimism about upcoming product launches, including McCrispy Chicken Strips and snack wraps. Stifel analysts maintained a Hold rating with a $300 price target, noting concerns over U.S. and International Operated Markets’ sales declines. Meanwhile, JPMorgan increased its price target for McDonald’s to $305, maintaining an Overweight rating, and highlighted the company’s franchise-focused business model as a stabilizing factor. McDonald’s continues to focus on value and affordability as part of its strategy to improve sales and traffic performance. The company also plans to introduce new menu items and marketing initiatives to boost growth in the coming quarters.
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