McDonald's Target Price Cut as Slower Sales Hit Fast-Food Giant

McDonald's Corp., the world's largest fast-food restaurant chain, has seen its target price cut by analysts due to slower sales. Despite maintaining a 'Buy' rating on shares of MCD, experts at Freedom Broker have revised their forecast downward, citing weaker comparable-sales momentum and revised plans for network expansion as limiting factors.

The company's second-quarter revenue fell short of market expectations, increasing 3.7% year over year to $7.1 billion, slightly below the consensus analyst forecast of $7.14 billion. Systemwide sales rose 5%, and global comparable sales rose 1.3%. However, in the home market, comparable sales rose only 0.8%, weaker than management expected.

The slowdown in comparable sales shows that the recovery in consumer demand is proceeding more slowly than expected, experts believe. Analysts adjusted their forecasts for network and sales growth but think the business's long-term drivers remain intact. The company attributes the results to a challenging consumer environment and lower traffic in certain major markets.