McDonald's Plummets into Bear Market Amid Turnaround Concerns
McDonald's stock has fallen into bear market territory after plummeting more than 20% from its March record high, sparking concerns about the fast-food giant's turnaround strategy. The company's shares closed at $268.94 on Tuesday, extending a months-long decline and heading toward its fifth straight month of loss.
Investors are worried about McDonald's uncertain recovery plans, citing weaker spending by lower-income customers, rising operating costs, and complaints over higher fast-food prices. To address these concerns, CEO Chris Kempczinski introduced the 'McDonald's NEXT' strategy, which includes menu changes, technology upgrades, restaurant improvements, and marketing efforts aimed at strengthening the brand's connection with consumers.
Despite some strengths shown in the second quarter, McDonald's core business has yet to recover from a difficult April. KeyBanc cut its price target for McDonald's to $315 from $330 last month but maintained an 'Overweight' rating on the stock. The firm noted that uncertainty around the company's strategy and expectations of more difficult comparisons ahead could limit near-term share gains.