BMO Cuts McDonald's Price Target Amid Strategy Concerns

BMO Capital reduced its price target for McDonald's stock (MCD) to $310 from $335, while maintaining an Outperform rating. This decision was based on concerns over the company's NEXT strategy and 2030 targets.

The firm cited lower-than-expected investment and front-loaded productivity as key factors in its revised estimate. BMO Capital also noted a 1% drag on 2027 and 2028 earnings per share, building to 2% to 3% by 2030.

Despite these concerns, the firm believes shares are undervalued at current levels, with a Fair Value above the market price. McDonald's has raised its dividend for 51 consecutive years and currently offers a 3.24% yield, underscoring its financial resilience.