If you only skim the headlines, it looks like consumers are doing just fine. Black Friday online sales in the U.S., for example, hit a record $11.8 billion—about 9% higher than last year. But a closer look tells a more complicated story. People are still spending, just with far more caution and an intense focus on value. Debt levels are rising, delinquencies are inching up, and lower-income households, in particular, seem stretched. In this environment, if you want exposure to the restaurant space without relying on a carefree consumer, McDonald’s (MCD) appears to be the safest bet. That’s why I’m bullish on the stock.
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A Slowing Consumer Behind Strong Headlines
So, to paint the picture for you, the latest retail report showed U.S. retail sales up just 0.2% in September, a slowdown from August’s 0.6% gain, with the key “control group” that feeds into GDP actually slipping. The Fed’s “Beige Book” report showed a somewhat similar picture, with consumer spending flat to down in most districts, and particular weakness among lower-income households and at discretionary retailers and restaurants. It’s no wonder most QSR stocks are down this year.
Meanwhile, households are leaning harder on their balance sheets. The New York Fed’s latest Household Debt and Credit report shows total debt at a record $18.59 trillion in Q3, with 4.5% of balances now in some stage of delinquency and credit-card and auto delinquencies rising fastest. Consumer sentiment has responded in kind, with the University of Michigan’s index hovering near its second-lowest reading since the 1950s, according to recent analysis of the so-called U.S. “affordability crisis.”
Even the supposedly cheerful Black Friday data has a twist. Stock analysis indicates growth is being helped by higher prices and a jump in “buy now, pay later” usage, which is on track to finance more than $20 billion of online holiday purchases this year.
In restaurants, you can already see the squeeze. Chipotle’s (CMG) latest quarter showed just 0.3% same-store sales growth, with transactions still negative, prompting management to cut its annual sales outlook for the third time this year and now expecting a low-single-digit decline.
Why McDonald’s Rides the Trade-Down
In the current economic environment, investors are looking for resilience when investing in QSR. In general business and restaurant contexts, QSR stands for “Quick Service Restaurant,” which is the industry term for what is commonly known as a fast-food restaurant.
Structurally, McDonald’s has a strong claim to resilience. About 95% of its 44,600 restaurants are franchised, allowing the company to earn royalties on top-line sales and collect rent on the underlying real estate—without relying on the far thinner margins of operating the restaurants itself. It’s essentially a toll-booth business model wrapped in a burger brand.
And unlike many of its peers, McDonald’s has spent the last year pivoting aggressively back to value. The company kept a $5 meal deal running for more than a year, launched $2.99 Snack Wraps nationwide in July, and in September brought back its classic Extra Value Meals in the U.S., cutting prices on eight core combos by about 15% versus ordering items à la carte. Management has been unusually explicit that it “learned its lesson on value,” after some earlier hiccups on that front.
So far, it’s working. In Q3, McDonald’s delivered 3.6% global comparable sales growth and about 8% systemwide sales growth, beating estimates despite an industry-wide traffic slump. U.S. comps were up 2.4%, aided by the relaunch of Snack Wraps and Extra Value Meals, as I just mentioned, even though total visits to the system fell roughly 3–4%.
The mix of customers offers great insight, as traffic from lower-income diners is down nearly double digits, but visits from higher-income customers have grown close to double digits as they trade down from pricier options. Yes, that’s not ideal socially, but for shareholders, it means McDonald’s is capturing the “downshift” from Chipotle-type occasions even while it fights to win back the more budget-constrained.
A Quality Franchise at a Normal Price
The good news, if you are eyeing the name in a beaten-down industry, is that, after a flat year for the stock, you no longer have to pay a significant premium. At today’s share price, McDonald’s trades at a P/E of roughly 25x this year’s expected EPS and around 23x the consensus EPS for 2026 of $13.22. For a global consumer staple with high returns on capital and a very visible growth runway, I believe the stock is reasonably priced today, especially given its strong resilience during various high-volatility periods.
And yes, you can find “cheaper” names in the space, like Restaurant Brands (QSR), which trades at about 18x forward EPS. Chipotle, after its brutal sell-off, is also trading at ~30x, well below its past 40-50x+ multiples. But QSR is more leveraged to franchisee execution and emerging-market volatility. At the same time, Chipotle carries higher traffic and margin risk precisely because its diners are feeling the squeeze and management is reluctant to fully embrace discounting.
Is MCD a Good Stock to Buy Now?
McDonald’s now has a Moderate Buy consensus rating on Wall Street, based on 10 Buy and 11 Hold ratings. Note that no analyst rates the stock a Sell. Also, at $335.39, the average MCD stock price forecast implies ~8% upside potential over the next 12 months. This highlights that most analysts don’t view the stock as overvalued, despite modest premiums relative to some other names in the space.
The Steady Hand in a Worsening Consumer Landscape
While consumer-focused headlines may still skew positive, the underlying economics are clearly tightening. Household debt continues to rise, delinquencies are creeping up, and more shoppers are leaning on “buy now, pay later” services to stretch their budgets. In this environment, McDonald’s stands out as the QSR leader best positioned to adapt to a weaker, value-driven consumer rather than sit still and absorb the blow.
If you want exposure to the restaurant space without depending on a volatile consumer rebound, the Golden Arches remain, in my view, the most reliable and defensible pick.