Morgan Stanley Cuts McDonald's Price Target to $297 Amid Investment Costs

Morgan Stanley has revised its price target for McDonald's stock to $297 from $308, citing expected investment costs that will weigh on earnings through 2030. The move comes after McDonald's Investor Day, where the company outlined its NEXT strategy to drive growth and productivity. Analyst Brian Harbour noted that while the top line reflects improvement, it may not meet McDonald's ambitious targets.

According to InvestingPro data, 13 analysts have lowered their earnings forecasts for McDonald's upcoming period, aligning with Morgan Stanley's more cautious outlook. This is despite UBS maintaining a Buy rating and setting a price target of $320, highlighting the company's focus on driving same-store sales and guest count growth through improved restaurant productivity.

Other firms, however, have expressed concerns over McDonald's strategies. Bernstein maintained a Market Perform rating with a $295 target, while Baird lowered its price target to $250, citing low visibility amid challenges for low-income consumers. BTIG also reduced its price target to $295, while keeping a Buy rating.

McDonald's stock currently trades at $236.50, near its 52-week low of $234.03 and down 21% year-to-date. Despite the near-term headwinds, InvestingPro analysis suggests the stock is undervalued at current levels.