Erste Group Bank Predicts Lower Earnings for McDonald's

Key Points

• Erste Group Bank lowered McDonald’s FY2026 earnings estimate to $12.87 per share from $12.92, slightly above the $12.85 analyst consensus; it projects FY2027 EPS of $13.80.
• Analyst sentiment remains broadly positive, with a “Moderate Buy” consensus and an average price target of $295.94 versus the stock’s reported $235.67 opening price, although several firms recently reduced their targets.
• McDonald’s raised its quarterly dividend to $1.93, or $7.72 annually, implying a 3.3% yield; the company’s latest quarter exceeded EPS expectations but fell slightly short on revenue.

McDonald's Corporation (NYSE:MCD - Free Report) - Analysts at Erste Group Bank lowered their FY2026 EPS estimates for shares of McDonald's in a research report issued to clients and investors on Thursday, October 8th. Erste Group Bank analyst S. Lingnau now forecasts that the fast-food giant will post earnings of $12.87 per share for the year, down from their prior estimate of $12.92. The consensus estimate for McDonald's' current full-year earnings is $12.85 per share. Erste Group Bank also issued estimates for McDonald's' FY2027 earnings at $13.80 EPS.

Other research analysts also recently issued research reports about the company. Argus cut their price target on McDonald's from $320.00 to $310.00 and set a "buy" rating for the company in a research note on Wednesday, August 26th. Seaport Research Partners began coverage on McDonald's in a research note on Wednesday, September 16th. They issued a "neutral" rating on the stock. Melius Research lowered their price objective on McDonald's from $250.00 to $230.00 and set a "sell" rating on the stock in a research note on Monday, September 28th. Daiwa Securities Group dropped their price objective on shares of McDonald's from $309.00 to $293.00 and set an "outperform" rating on the stock in a report on Thursday, August 6th. Finally, Deutsche Bank Aktiengesellschaft cut their target price on shares of McDonald's from $325.00 to $300.00 and set a "buy" rating for the company in a research report on Monday, September 14th. One analyst has rated the stock with a Strong Buy rating, twenty-two have issued a Buy rating, thirteen have assigned a Hold rating and one has assigned a Sell rating to the company's stock. According to data from MarketBeat, the stock currently has an average rating of "Moderate Buy" and a consensus price target of $295.94.

McDonald's Price Performance

Shares of MCD opened at $235.67 on Tuesday. McDonald's has a 1 year low of $229.20 and a 1 year high of $341.75. The stock's fifty day moving average price is $254.71 and its two-hundred day moving average price is $273.77. The firm has a market cap of $166.77 billion, a PE ratio of 19.14, a PEG ratio of 2.64 and a beta of 0.44.

McDonald's (NYSE:MCD - Get Free Report) last announced its quarterly earnings data on Tuesday, August 4th. The fast-food giant reported $3.38 earnings per share for the quarter, beating the consensus estimate of $3.32 by $0.06. McDonald's had a negative return on equity of 572.06% and a net margin of 31.72%. The business had revenue of $7.10 billion during the quarter, compared to analyst estimates of $7.13 billion. During the same period in the prior year, the company earned $3.19 earnings per share. McDonald's's revenue was up 3.7% compared to the same quarter last year.

Institutional Trading of McDonald's

A number of hedge funds and other institutional investors have recently made changes to their positions in the stock. Abound Financial LLC purchased a new stake in McDonald's during the 4th quarter valued at approximately $30,000. Purpose Unlimited Inc. bought a new position in shares of McDonald's during the fourth quarter worth $31,000. GKV Capital Management Co. Inc. purchased a new position in McDonald's during the first quarter valued at $33,000. Merkkuri Wealth Advisors LLC purchased a new position in McDonald's during the first quarter valued at $43,000. Finally, Burkett Financial Services LLC increased its holdings in McDonald's by 2,312.5% in the 3rd quarter. Burkett Financial Services LLC now owns 193 shares of the fast-food giant's stock valued at $45,000 after acquiring an additional 185 shares during the last quarter. 70.29% of the stock is currently owned by institutional investors.

McDonald's Increases Dividend

The business also recently declared a quarterly dividend, which will be paid on Tuesday, December 15th. Stockholders of record on Tuesday, December 1st will be given a $1.93 dividend. This represents a $7.72 annualized dividend and a dividend yield of 3.3%. This is a boost from McDonald's's previous quarterly dividend of $1.86. The ex-dividend date is Tuesday, December 1st. McDonald's's dividend payout ratio (DPR) is presently 60.44%.

McDonald's News Roundup

Here are the key news stories impacting McDonald's this week:

• Positive Sentiment: Analysts’ consensus price target is $295.94, substantially above the current trading level, suggesting Wall Street sees potential recovery. McDonald’s also benefits from a powerful global brand, a heavily franchised model that generates cash flow, and a growing dividend. McDonald's Corporation Stock Has Consensus Target Price of $295.94 McDonald's Has a Powerful Brand and a Growing Dividend
• Positive Sentiment: A former hedge fund manager described MCD as “moderately undervalued” after its decline to roughly four-year lows, arguing that the selloff may create a buying opportunity for long-term investors. McDonald’s Stock Moderately Undervalued
• Neutral Sentiment: McDonald’s is emphasizing chicken and beverages to drive growth, but consumer-spending data indicates Chick-fil-A and coffee chains are gaining more traction in those categories. The strategy could help diversify sales, though execution remains uncertain. McDonald's Is Leaning Into Chicken and Drinks to Grow
• Negative Sentiment: The Restaurant NEXT overhaul is facing resistance from franchisees, who may need to spend about $800,000 per U.S. drive-thru location on technology and operational upgrades. Investors are questioning whether the investment will generate adequate returns, adding execution and margin risk. McDonald’s $800,000 Overhaul Hits Resistance
• Negative Sentiment: Promotions and value meals have not yet produced strong enough demand, raising concerns that McDonald’s may need to sacrifice pricing power or increase discounts to attract budget-conscious customers. McDonald's Could Still Go Lower
• Negative Sentiment: Additional negative headlines include an individual restaurant’s poor ranking and a lawsuit alleging AI-driven pricing practices. Unverified social-media claims that McDonald’s lost a lawsuit to chef Jamie Oliver have no proof and do not appear to represent a confirmed corporate event. McDonald's Sued Over AI Pricing Claims

About McDonald's

McDonald’s Corporation is a global quick-service restaurant company that operates and franchises restaurants under the McDonald’s brand. Its restaurants serve a menu that includes hamburgers, cheeseburgers, chicken sandwiches, French fries, breakfast items, desserts, salads, beverages and coffee. Offerings vary by market, and many locations provide drive-thru service, delivery and digital ordering through the McDonald’s mobile app.

The company operates through a heavily franchised business model, with restaurants owned and operated by independent franchisees, affiliates and the company itself.

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