Analyst Andrew Charles from TD Cowen maintained a Hold rating on McDonald’s and increased the price target to $315.00 from $305.00.
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Andrew Charles has given his Hold rating due to a combination of factors influencing McDonald’s current market position. The company’s U.S. same-store sales (SSS) are expected to remain stable despite a challenging environment for lower-income consumers, which is a positive sign. However, the stock is currently trading at a relatively high price-to-earnings ratio of 23 times the fiscal year two earnings, which suggests limited potential for significant upside or alpha in the near term.
Additionally, while McDonald’s has shown strong performance in comparison to its quick-service peers, particularly in the second quarter, the company has not provided specific guidance for the third quarter due to uncertainties affecting middle and lower-income consumers. The management anticipates better performance in the latter half of the year compared to the first half, but the overall outlook remains cautious. These factors contribute to the Hold rating as the stock’s current valuation does not present a compelling opportunity for substantial gains.
Charles covers the Consumer Cyclical sector, focusing on stocks such as Starbucks, Wingstop, and Sweetgreen. According to TipRanks, Charles has an average return of 9.2% and a 54.45% success rate on recommended stocks.
In another report released today, TR | OpenAI – 4o also reiterated a Hold rating on the stock with a $327.00 price target.