Fast-food restaurant McDonald’s (NYSE:MCD) is looking to give the $5 Meal Deal another go in an attempt to draw in low-income customers who have cut back on spending due to economic pressures. The company hopes that offering a budget-friendly meal option that consists of a McChicken or McDouble with fries and a drink will increase foot traffic and, by extension, profits in their restaurants.
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But not all the franchise owners are on board, especially in places like California, where paying up to $20 per hour means the math might not quite work out. Nevertheless, McDonald’s is negotiating with Coca-Cola (NYSE:KO) to try and get it to help franchisees cover some of the costs associated with the Meal Deal.
McDonald’s generates most of its revenue from franchised restaurants – over 60%, as per the image below. Therefore, it’s important that the firm helps them succeed. Indeed, McDonald’s is doing just that. In addition to its ongoing negotiations with Coca-Cola, McDonald’s recently announced that it would back franchisees with a digital marketing fund.
What Is the Future of McDonald’s Stock?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on MCD stock based on 16 Buys and 10 Holds assigned in the past three months, as indicated by the graphic below. After an almost 5% loss in its share price over the past year, the average MCD price target of $320.48 per share implies 16.63% upside potential.
