McDonald's at Two-Year Low: Wall Street Sees 43% Upside Opportunity
McDonald's has hit a two-year low, despite being one of the longest-running dividend payers in the world. The company's stock price is currently around $248.48, significantly lower than its 52-week high of $335.18. This decline comes as the broader market has rallied over 11% year-to-date.
According to Truist analyst Jake Bartlett, this gap between McDonald's stock price and Wall Street's average target is a buying opportunity for patient investors. Bartlett predicts that shares could gain around 43% and reach $356, making it one of the most attractive stocks in the sector.
The decline can be attributed to the company's Q2 execution miss, where global comparable sales grew only 1.3%, down from 3.8% a year earlier. CEO Chris Kempczinski has acknowledged that the issue is not with their strategy but rather with their ability to execute it effectively. The under-$3 value menu rollout and reduced digital offers were cited as contributing factors.
Despite this setback, sell-side coverage remains constructive, with 4 analysts rating McDonald's as a 'Strong Buy' and 15 more recommending a 'Buy'. Bartlett's $356 target is based on four key planks: the success of the $5 Meal Deal extension, digital monetization through loyalty programs, international recovery, and franchisee operating leverage.