Fast-food chain McDonald’s (MCD) is scheduled to announce its results for the first quarter of 2025 on Thursday, May 1. Despite fears of a slowdown in consumer spending due to tariff pressures and macro headwinds, MCD stock has risen 9.3% year-to-date, as investors view the company as a more resilient player compared to many of its peers, thanks to its extensive supply chain and lean business model. Wall Street expects McDonald’s to report Q1 EPS (earnings per share) of $2.66, indicating a 1.5% year-over-year decline.
Meanwhile, revenue is expected to fall 1.1% to $6.10 billion. McDonald’s same-store sales (SSS) growth has been lackluster over recent quarters. According to Main Street Data, the company’s overall SSS increased 0.4% in Q4 2024. Notably, comparable sales in the U.S. declined by 1.4% in the fourth quarter due to an E. coli outbreak just weeks into the quarter.
Investors will pay attention to pay management’s commentary about any potential improvements in SSS growth as the year progresses, driven by the company’s efforts to enhance its menu options and attract value-conscious customers.
Analysts’ Views Ahead of McDonald’s Q1 Earnings
Heading into the Q1 results, KeyBanc analyst Eric Gonzalez reiterated a Buy rating on McDonald’s stock with a price target of $340. The 4-star analyst stated that he continues to like MCD, noting that the chain’s trends likely accelerated in March and April. Gonzalez contends that following months of struggles, McDonald’s seems to be on the right track, offering superior everyday value alongside an exceptional trade-up opportunity.
Despite the likely shortfall in Q1 2025 SSS growth compared to the Street’s estimate for McDonald’s USA (KeyBanc estimate -2.0% compared to consensus estimate of -0.7%), Gonzalez continues to believe in his Q2 2025 SSS growth forecast of 3.5%. The analyst expects MCD to gain from its “Minecraft Movie Meal.”
Meanwhile, BTIG analyst Peter Saleh reiterated a Hold rating on MCD stock, noting that his firm’s recent franchise checks indicate a notable inflection in the company’s April sales trends and a more optimistic tone from operators compared to recent quarters. The checks reflected “choppy, but muted, sales trends” through Q1 in the flat to low-single digit range, pressured by cold weather and one less day in February, but inflected to mid-to-high single-digits in April due to the Minecraft movie promotion.
The 5-star analyst added that franchisees were confident about the full-year outlook, given the April trends, menu lineup, and easy comparisons, and a broad feeling that McDonald’s “was getting its prior momentum back.” While Saleh is quite encouraged by the recent sales trends and better full-year outlook, the upside needed to justify a more positive view keeps him “begrudgingly” on the sidelines.
Here’s What Options Traders Anticipate
Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. If this sounds complicated, don’t worry, the Options tool does this for you.
Indeed, it currently says that options traders are expecting about a 3.6% move in either direction in MCD stock in reaction to Q1 results.
Is MCD a Good Stock to Buy?
Amid ongoing pressures, Wall Street has a Moderate Buy consensus rating on McDonald’s stock, based on 15 Buys and 10 Holds. The average MCD stock price target of $326.62 implies about 3.1% upside potential from current levels.
