BTIG Upgrades McDonald's (MCD) to Buy

BTIG analyst Peter Saleh upgraded McDonald's (NYSE: MCD) from Neutral to Buy with a price target of $360.00.

The analyst comments "After two years on the sidelines, we are upgrading shares of McDonald's to Buy from Neutral as our franchise checks suggest changes to the value/promotions strategy is driving traffic growth on a consistent basis. Furthermore, we are optimistic that the new CosMc's beverage platform will launch in 1H26, and provide the next major catalyst for U.S same-store sales and transactions. While we recognize the recent weather-related setback in January, we believe the underlying trend is healthy and expect sales to bounce back as weather normalizes. Lastly, we expect the change in value strategy and perception to lead to the most meaningful earnings growth for the company since 2023. Our new price target is $360. ■ Fourth Quarter Strong, But Weather Sours January Sales. Our recent franchisee conversations suggest McDonald's investment in value with the increased discounts on the Extra Value Meals (EVM) in conjunction with the $5 and $8 Meals is driving meaningful guest count improvements, and shifting consumer perception back to a value leadership position. The checks highlighted the success of the Monopoly promotion (October) and the Grinch (December). In January sales were very strong until the major snow/ice storm disrupted trends. Several operators indicated that even after the initial storm, operating hours were curtailed, with some stores closing much earlier than usual due to the freezing temps. In some instances, franchisees lost 2-3 days of business in January, dragging same-store sales and traffic by several hundreds of basis points if not more. In our view, the underlying traffic trend was very healthy and should bounce back when the weather pattern normalizes. We expect a comp tailwind beginning in February from the higher tax refunds, and elimination of taxes on tips and overtime."

For an analyst ratings summary and ratings history on McDonald's click here. For more ratings news on McDonald's click here.

Shares of McDonald's closed at $315.00 yesterday.

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