- Price
- $230.94 → $232.45(+0.7%)
- Discount
- 14.5% → 13.9%(−0.6 pts)
- Risks
- Fewer customers visit McDonald's US restaurants. US guest counts fell in Q2 2026, and the CFO expected US same-store sales to be slightly negative in Q3. About 36% of McDonald's US visitors come from lower-income areas, and these customers cut back the most. Competitors also push low-price deals. If traffic does not recover, rent and royalties grow slowly.
The $8.5 billion franchisee plan costs money now, and its benefits come over about ten years. Rent relief lowers McDonald's highest-margin income. Analysts estimate it cuts earnings per share by about 1% in 2027 and 2028, and by 2% to 3% by 2030. Only 60% to 65% of franchisees used the new value prices in Q2 2026, so franchisee support is not certain.
Higher interest rates lower the price investors pay for steady rent and royalties. The 10-year Treasury yield rose above 5% in September 2026, and the stock fell about 14% in one month. The direct cost is small, because about 97% of McDonald's debt has a fixed rate, at an average of about 4.0%.
McDonald's had about $39.9 billion of debt at June 30, 2026, about 2.6 times EBITDA, and its shareholders' equity is negative because of past buybacks. In 2025, dividends and buybacks used about all of its free cash flow. The franchisee plan leaves less cash for buybacks. Its credit ratings are BBB+ at S&P and Baa1 at Moody's.
Sales outside the US are slowing too. Same-store sales grew only 1.5% in International Operated Markets and 1.9% in International Developmental Licensed Markets in Q2 2026. China and the Middle East add political risk, and a strong US dollar lowers the value of foreign sales.
Weight-loss drugs such as GLP-1s can reduce how much people eat out. Higher beef prices and higher minimum wages, such as California's $20 fast-food wage, lower franchisee profit first, and this can slow new restaurant openings. A food-safety problem, such as the E. coli outbreak in October 2024, can also cut traffic for months. A proposed class action filed in October 2026 alleges that McDonald's pricing tool breaks antitrust law. The case is at an early stage.
- Recent events
- 2026-10-06: Bloomberg reported that some US franchisees object to the cost of the restaurant upgrades in the new plan, at least $800,000 per restaurant.
2026-10-02: A customer filed a proposed class action against McDonald's in a US federal court in Illinois. It alleges that McDonald's AI-enhanced pricing tool shares nonpublic store data with franchisees and helps raise menu prices, against antitrust law. McDonald's said that the suit is "filled with inaccuracies", that franchisees set menu prices, and that it will defend itself.
2026-09-28: Melius Research kept its Sell rating and cut its price target to $230 from $250.
2026-09-24: After Investor Day, several analysts cut their price targets: Morgan Stanley to $297, TD Cowen to $270, and Evercore ISI to $300. BMO kept $310. Evercore lowered its 2027 to 2030 estimates by about 3% because of the rent relief, more refranchising, and slower US sales.
2026-09-23: At its Investor Day, McDonald's promised about $8.5 billion of rent relief and capital support to franchisees through 2036, about $5 billion of it by 2030. It said the plan adds about $100,000 of cash flow a year to an average US restaurant. Its 2030 targets include an operating margin in the low-to-mid 50% range and a franchised share of about 98% by the end of 2028. The CEO said industry traffic will stay flat while inflation stays high. The stock fell 4.81% that day, its worst day since March 2020.
2026-09-17: McDonald's raised its quarterly dividend by 4% to $1.93 per share. This is its 50th annual increase in a row.
2026-08-04: McDonald's reported Q2 2026 results. Revenue was $7.10 billion, up 4%. Adjusted EPS was $3.38, up 6%. Global same-store sales grew 1.3%, and US same-store sales grew 0.8%, with fewer guests. Management said most of the US shortfall came from weak execution of its value menu. It moved the 50,000-restaurant goal from 2027 to 2028. Skye Anderson replaced Joe Erlinger as president of McDonald's USA.
2026-07-24: Third-party foot-traffic data (Placer.ai) showed McDonald's US visits down 4.5% in Q2 2026 from a year earlier, against 3.0% for the fast-food industry.
2026-05-07: McDonald's reported Q1 2026 results. Revenue was $6.52 billion, up 9%. Adjusted EPS was $2.83. Global same-store sales grew 3.8%, and US same-store sales grew 3.9%, mostly from higher prices.
2026-02-11: McDonald's reported Q4 and full-year 2025 results. Global same-store sales grew 5.7% in Q4, and US same-store sales grew 6.8%. Full-year adjusted EPS was $12.20. For 2026, it planned about 2,600 new restaurants, about 2,100 net of closures.