McDonald's Value-First Push Fails To Spur Multiple Expansion: Analyst

Core Viewpoint - McDonald's value-first strategy may not lead to positive U.S. sales revisions or justify multiple expansion, according to analyst Andrew M. Charles [1][2] Financial Performance - McDonald's reported second-quarter adjusted earnings per share of $3.19, exceeding the analyst consensus estimate of $3.14 [1] - Quarterly sales reached $6.843 billion, surpassing the expected $6.682 billion [1] Analyst Insights - Charles maintains a Hold rating and has raised the price forecast from $305 to $315 [1] - He believes that reviving successful marketing and menu innovations from 2020-2023 would be more profitable than the current value focus [2] - U.S. comparable-sales growth is projected at 1.7% for 2025 as a base-case assumption [4] Market Conditions - McDonald's is navigating a challenging environment with a softer lower-income consumer backdrop [3] - The international comparable sales forecast has been raised due to second-quarter outperformance, driven by value initiatives and prudent pricing [3] Future Outlook - Charles does not expect significant upside for McDonald's shares to deliver material alpha in the near term [4] - Upcoming catalysts include the third-quarter EPS report in November and ongoing tracking of proprietary survey data to assess the effectiveness of value initiatives [4]