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McDonald's Climbs 8% YTD: Right Time to Buy the Stock or Wait?
MCDMcDonald's(MCD) ZACKS·2025-03-28 15:45

Core Viewpoint - McDonald's Corporation (MCD) has shown strong stock performance, gaining 7.8% year-to-date, outperforming its industry peers and broader market indices [1][4]. Company Performance - Following a significant E. coli outbreak, McDonald's has regained consumer confidence by prioritizing food safety and removing the problematic supplier from its supply chain [3]. - The company has effectively implemented its "Accelerating the Arches" strategy, menu innovations, and value offerings, contributing to its positive performance [3][10]. - McDonald's has outperformed competitors like Restaurant Brands International (5.5% gain), Wendy's (7.9% decline), and Chipotle (15.5% decline) year-to-date [4]. Earnings Estimates - The 2025 earnings estimate for McDonald's has increased by 0.1% over the past 30 days, with a projected year-over-year growth of 4.5% [5]. - Current earnings estimates for 2025 are 12.25pershare,withaslightupwardrevisionfrompreviousestimates[6].GrowthStrategies−McDonald′saimstoenhanceguestcountsbyfocusingonfoodquality,convenience,andvalue,withinitiativesliketheMcValueplatformlaunchedinJanuary2025[8][10].−Thecompanyplanstoopenapproximately2,200newrestaurantsgloballyin2025,targetingatotalof50,000by2027,emphasizingglobalexpansionasakeygrowthstrategy[11].−Increasedfocusondeliveryservicesanddigitalengagementisexpectedtodrivesales,withagoalofachieving3012.25 per share, with a slight upward revision from previous estimates [6]. Growth Strategies - McDonald's aims to enhance guest counts by focusing on food quality, convenience, and value, with initiatives like the McValue platform launched in January 2025 [8][10]. - The company plans to open approximately 2,200 new restaurants globally in 2025, targeting a total of 50,000 by 2027, emphasizing global expansion as a key growth strategy [11]. - Increased focus on delivery services and digital engagement is expected to drive sales, with a goal of achieving 30% of system-wide delivery sales through its mobile app by 2027 [12]. Valuation - McDonald's stock is currently trading at a discount compared to industry peers based on a forward 12-month price-to-earnings (P/E) ratio, making it an attractive option for investors [13]. Analyst Sentiment - Analysts are optimistic about McDonald's, with 22 out of 37 recommendations rated as Strong Buy, leading to an Average Brokerage Recommendation (ABR) of 1.74 [17]. - The average price target for McDonald's stock is 331.1 per share, indicating a potential upside of 5.9% from current levels [17].