McDonald’s (MCD) stock has been upgraded by analysts at Citigroup (C) to a Buy rating from Neutral previously.
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Top-rated analysts Jon Tower and Karen Holthouse raised their price target on MCD stock to $334 from $311 based on a projected recovery in the restaurant chain’s margins and earnings in 2025. Shares of McDonald’s were down about 1% amid a broader market selloff on January 10.
Citigroup sees MCD stock gaining ground from improved earnings in the year ahead as the company’s renewed focus on value pricing pays off. “We expect 2025 will be a year where scale advantages drive share gains across key markets,” wrote the two analysts in a note to clients.
Value Menu
Tower and Holthouse note that between 2022 and 2024, steady price increases took a toll on consumer perceptions of McDonald’s and its brand, resulting in a decline in sales, with the company posting its first quarter of negative U.S. restaurant sales since the start of the Covid-19 pandemic.
However, the analysts say McDonald’s now appears to have righted its ship with a new focus on its McValue Menu. The company’s $5 Meal Deal and Buy One, Add One for $1 promotion have proven extremely popular with customers.
Citigroup said in its upgrade of MCD stock that the popularity of the McValue menu and return of items such as Snack Wraps should boost comparable sales over the coming year. MCD stock has declined 1% over the last 12 months.
Is MD Stock a Buy?
The stock of McDonald’s has a consensus Moderate Buy rating among 25 Wall Street analysts. That rating is based on 16 Buy and nine Hold recommendations issued in the last three months. The average MCD price target of $321.14 implies 13.05% upside from current levels.
