Seaport Slaps McDonald's with Neutral Rating Over Execution Concerns

Seaport Global Securities has initiated coverage on McDonald's Corp. (MCD) with a Neutral rating, citing execution challenges and a difficult operating environment.

The firm said McDonald's missed an opportunity to leverage its competitive advantages in 2026 as execution fell short of expectations.

According to Seaport, the company's scale advantages and presence are unmatched within the quick service restaurant industry, but it is facing a challenging operating environment characterized by rising interest rates, economic pressure on lower-income consumers, elevated beef costs, and an unrelenting competitive environment.

The firm said McDonald's has the right strategy and tools to jumpstart momentum over time, but material improvement is unlikely until mid-2027 based on year-over-year comparisons. The stock trades at 18 times 2027 earnings per share, six turns below its five-year historical average of 24 times next-twelve-months price-to-earnings.

Seaport said shares are fairly valued given current interest rates, with the Fed rate or above 5%, the expected step-up in capital expenditures, and the likelihood that U.S. same-store sales momentum remains under pressure in the near-term.