Oppenheimer said the prolonged stagnation in shares of McDonald’s has created an attractive entry point for investors. The investment firm upgraded the fast-food chain to outperform from perform. Analyst Brian Bittner also implemented a price target of $355, implying upside of 17% from here. Bittner’s upgrade comes after two years spent on the sidelines and as a “golden opportunity” for investors has arisen. MCD 1Y mountain MCD 1Y chart “We identify a golden opportunity to upgrade MCD following 15 months of being stuck in a ~$300 trading range,” he wrote. “Shares have been range-bound for much of the past two years as negative EPS revisions have been a consistent theme since early-2024. This dynamic was driven by [same-store sales] underperformance and margin erosion relative to Street’s original expectations.” The analyst attributed this decline to McDonald’s natural overexposure to the low-end consumer, a cohort that has declined in double digits across the quick-service industry in the past two years. But going forward, Bittner has identified a path for U.S. same-store sales upside, while international same-store sales momentum also remains strong. “International markets account for ~70% of MCD’s global restaurant footprint with +6% unit expansion and no signs of weakening,” Bittner said. He added that the company’s unit growth also appears underappreciated. McDonald’s has remained on target with its 4% growth, while its peers have fallen short, Bittner said. Bittner also believes that consensus is overlooking a strong innovation pipeline, including an updated beverage platform rollout. The Street also appears to be ignoring any leveling out or recovery in the low-end consumer. “MCD could become more in favor with investors on any signs of low-end reversal,” the analyst added. “Pushback will focus on ‘health trends’ and valuation, but we believe the potential idiosyncratic tailwinds in the medium term are too powerful to ignore.” Shares of McDonald’s have added less than 5% in the past year.
