Overview
Jefferies confirmed a Buy rating on McDonald’s and retained a $360.00 price target as the fast-food operator prepares to release fourth-quarter results. The price target implies roughly a 16% upside from a current share level of $309.25, with analyst targets reported across a $250 to $372 range. Publicly available data indicate McDonald’s equity exhibits relatively low historical volatility, with a beta near 0.53.
Near-term sales and earnings expectations
On the sales front, Jefferies expects U.S. comparable-restaurant sales to increase by 4.5% in the fourth quarter, which is close to the consensus estimate of 4.7%. For the quarter, the firm models diluted earnings per share of $3.00, a touch below the consensus of $3.05. Jefferies attributes the variance to differences in assumed tax rates and the treatment of interest expense in its forecast.
Investors have a short wait for definitive numbers: the next earnings date is reported to be February 11, which is 16 days away. Over the last twelve months, McDonald’s reported diluted EPS amounting to $11.72.
Data cited to support outlook
To support its view that McDonald’s is regaining traction, Jefferies referenced independent sales data that showed a 4.8% year-over-year increase, representing a 260 basis point improvement compared with the prior quarter. Additionally, foot-traffic measures showed material quarter-over-quarter improvement, which the firm notes may be tied to higher incidence of value-menu transactions.
Medium-term projections and cost levers
Looking beyond the quarter, Jefferies projects fiscal 2026 EPS of $13.25, which the firm views as consistent with consensus. For fiscal 2027, Jefferies’ EPS forecast is $14.50, slightly above market consensus. The firm also highlights potential upside from operating-leverage initiatives: reductions in general and administrative expenses could move those costs closer to approximately 2% of system sales, a level Jefferies says is observed at global quick-service peers.
Analyst activity and market reaction
McDonald’s has seen a number of analyst moves recently. KeyBanc raised its price target to $340 while maintaining an Overweight rating and pointed to effective execution of the value strategy in the referenced quarter. TD Cowen reiterated a Hold rating with a $320 target, which aligns with expectations for about 7% U.S. comparable sales growth for the period. Bernstein kept a Market Perform rating with a $320 target and highlighted opportunities around a la carte pricing. Guggenheim raised its target to $310 from $295, noting resilient same-store sales in the United States. Separately, BMO Capital listed McDonald’s and Starbucks among its top restaurant picks for 2026 despite potential industry headwinds.
Takeaway
Jefferies’ Buy stance is grounded in improving sales trends and the potential for margin recovery through expense discipline, even as the firm models slightly softer quarterly EPS than consensus because of tax and interest assumptions. Analyst coverage remains mixed, with recent target adjustments and differing ratings reflecting a range of views on the sustainability of the company’s value-driven gains.