McDonald's Value Play: Shares Undervalued Despite Slowing Sales Growth
McDonald's is revamping its US value strategy in response to slowing sales growth. The company's stock may be undervalued, according to CNBC, which reports that McDonald's shares closed near $248.50, only slightly higher than their price five years ago.
A UBS study found that the percentage of US consumers who consider McDonald's a good value has dropped from 55% in 2020 to about 40% in 2024.
In an effort to boost sales, McDonald's is implementing temporary menu items, national digital promotions, and personalized offers for loyalty members. The company expects revenue to reach $28.2 billion by 2026, up from $23.2 billion in 2021, while net income is projected to rise to around $9.15 billion.
McDonald's shares trade at a multiple of 19.2 times forward earnings, down from nearly 25 times five years ago and the lowest level in over a decade.