Citi upgraded McDonald’s (MCD) to Buy from Neutral with a price target of $334, up from $311. After a year-plus transitioning through cumulative pricing pushback by consumers, Citi expects 2025 will be a year where McDonald’s “fully leans back into its scale advantages,” drives share gains in key markets and fuels a recovery in margins, the analyst tells investors in a research note. The firm believes McDonald’s has solved the fundamental challenge of national value by letting franchisee use the “base” item price to manage profitability and believes “leaning back into the megaphone of national advertising in 2025 will win back lost occasions.” Accelerating relative share gains and a return to 3%-plus U.S. comp growth in 2025 will fuel multiple expansion, contends Citi.
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