McDonald's (MCD) Stock Forecast & Price Target

McDonald's demonstrates a positive financial outlook with notable improvements in same-store sales and traffic, particularly driven by successful promotions and menu innovations. The firm has consistently capitalized on its strong franchise model, generating approximately 61% of its revenue from franchise royalties and rent, which provide a stable income stream. Additionally, ongoing enhancements in digital sales and national value platforms position the company for sustained growth despite facing challenges in certain markets.

The negative outlook on McDonald's stock is supported by several financial concerns, primarily related to flat to declining store-level cash flow projections for 2025. Franchisees are facing depressed margins due to prolonged inflation and required investments, alongside significant same-store sales and traffic declines attributed to temporary business interruptions. Additionally, the brand's ability to attract consumers may be compromised by food safety issues, reduced appeal from recent price increases, and execution challenges stemming from executive turnover.