Goldman Sachs upgrades McDonald's on market share push

Investing.com -- Goldman Sachs upgraded McDonald’s (NYSE: MCD) to Buy on expectations the fast-food giant will regain market share through product and marketing changes, even as pressure on middle-income consumers weighs on the broader restaurant industry.

Analysts said recent weak same-store sales trends at McDonald’s, that averages a 1% decline over the past year, should reverse as the company leans on its scale and digital capabilities to drive traffic.

The brokerage expects same-store sales to turn positive, averaging 2% to 3% growth from the second quarter of 2025.

Goldman pointed to new items such as the return of snack wraps and the addition of a “daily double” burger to McDonald’s value menu as potential catalysts.

Management’s commitment to regaining share in a slower consumer spending environment was also a factor in the call.

The firm sees an 18% price upside, or 20% including dividends, to its price target of $345.

Cheesecake Factory (NASDAQ: CAKE) was downgraded to Neutral from Buy after its 35% rally this year, which Goldman said leaves limited near-term upside.

The stock now trades at a significant premium to its five-year average valuation.

While analysts still view Cheesecake Factory’s unit growth and operational improvements positively, they said the market has already priced in much of the near-term optimism.

The firm’s new price target of $67 implies about 5% upside, below the 8% average across its restaurant coverage.

Goldman continues to favor stocks showing product innovation and share gains, including Chipotle (NYSE: CMG), Domino’s, Brinker, and McDonald’s, operational turnarounds (Shake Shack (NYSE: SHAK), Restaurant Brands (NYSE: QSR)), and consistent unit expansion (Wingstop (NASDAQ: WING), Yum Brands).

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