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McDonald's Corporation (MCD), headquartered in Chicago, Illinois, operates and franchises restaurants under the McDonald's brand. Valued at $210.9 billion by market cap, MCD is the world's largest fast-food restaurant chain that serves a wide range of menu items, including burgers, chicken sandwiches, fries, beverages, and breakfast options, along with seasonal promotional offerings. With a global presence in over 40,000 locations in more than 100 countries, approximately 95% of its restaurants are owned and operated by independent local business owners.
Shares of this fast-food giant have underperformed the broader market over the past year. MCD has gained 6.6% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 20.7%. However, in 2025, MCD stock is up 6.4%,surpassing SPX’s 3.1% rise on a YTD basis.
Narrowing the focus, MCD’s underperformance is also apparent compared to AdvisorShares Restaurant ETF (EATZ). The exchange-traded fund has gained about 29.6% over the past year. Moreover, the ETF’s 6.7% gains on a YTD basis outshine the stock’s returns over the same time frame
MCD's underperformance stems from rising commodity costs, and elevated wages due to inflation affecting profitability. Additionally, the impact of an E. coli outbreak in October that temporarily halted Quarter Pounder sales across many of its 14,000 U.S. restaurants and its reliance on aggressive discounting strategies such as the $5 meal deal may strain franchisee margins. Moreover, changing consumer preferences and higher menu prices have further threatened the demand.
On Feb. 10,MCD shares closed up more than 4% after reporting its Q4 results. Its adjusted EPS of $2.83 matched Wall Street expectations. The company’s revenue was $6.4 billion, missing Wall Street forecasts of $6.5 billion.
For fiscal 2025, ending in December, analysts expect MCD’s EPS to grow 5.4% to $12.35 on a diluted basis. The company’s earnings surprise history is mixed. It beat or matched the consensus estimates in two of the last four quarters while missing the forecast on two other occasions.
Among the 34 analysts covering MCD stock, the consensus is a “Moderate Buy.” That’s based on 19 “Strong Buy” ratings, two “Moderate Buys,” and 13 “Holds.”
This configuration is more bullish than a month ago, with 18 analysts suggesting a “Strong Buy.”
On Feb. 10, Barclays PLC (BCS) kept an “Overweight” rating on MCD and raised the price target to $350, implying a potential upside of 13.5% from current levels.
The mean price target of $323.52 represents a 4.9% premium to MCD’s current price levels. The Street-high price target of $360 suggests an upside potential of 16.7%.
