Fast food giants are feeling the heat as consumers tighten their wallets, global uncertainty rattles expansion plans, and the health-conscious wave continues to rise. The king of consistency, McDonald’s (MCD), long symbolized by its golden arches, is not shining quite as bright lately.

Earlier in June, Morgan Stanley downgraded the fast-food titan to “Equal Weight,” flagging that most near-term gains are baked in while long-term headwinds loom large. The investment bank trimmed the price target to $324, citing structural pressures that could cap upside.

McDonald’s, a Dividend Aristocrat that has increased payouts for over 25 consecutive years, has long been a bedrock for income investors. But in a climate where pricing power faces pushback and value menus struggle to meet margin goals, cracks are beginning to show. 

While MCD stock is under pressure, is the stock still a feast for income investors, or is it time to clear the table on this longtime favorite?

About McDonald’s Stock

McDonald’s (MCD) is a global fast-food giant with over 40,000 locations across over 100 countries. Known for its iconic fries and burgers, McDonald’s boasts a $208 billion market cap. With 93% of its stores franchised, the company leans into digital innovation, delivery, and convenience. Even as rising costs and health trends pose challenges, McDonald’s stays strong in the quick-service restaurant game.

While McDonald’s stock has generated 11% returns over the past 52 weeks, it is seeing some weakness lately with a 9% slump over the past month amid concern over pricing fatigue, the emerging threat of appetite-suppressant GLP‑1 weight‑loss drugs, which could depress fast-food demand over time, and mounting analyst downgrades.

McDonald’s remains a powerhouse for income investors, raising payouts for 48 straight years. Its dividend yields 2.5% annually. Plus, with a 53.4% payout ratio, the dividend appears sustainable, rewarding shareholders today while keeping headroom for future hikes intact.

McDonald’s Missed Q1 Estimates 

The company released ira fiscal first quarter 2025 report on May 1, missing revenue estimates and meeting earnings per share estimates. Its consolidated revenues fell 3.5% year over year to $5.9 billion, while adjusted EPS decreased marginally to $2.67. 

McDonald’s global comparable sales declined by 1%, though adjusted for the Leap Day effect, the figure was essentially flat. In the U.S., sales dropped 3.6% as economic uncertainty compelled customers to pull back. 

Operating income also edged down 3% to $2.6 billion, weighed by restructuring costs tied to its “Accelerating the Organization” initiative.

A bright spot emerged in McDonald’s loyalty program, which helped drive roughly $8 billion in systemwide sales in Q1 and surpassed $31 billion across 60 markets over the trailing 12 months. 

Although macroeconomic headwinds are affecting customer spending and near-term performance, value initiatives and upcoming product launches are expected to help stabilize momentum later in the year.

McDonald’s reaffirmed its full-year 2025 targets, cautiously optimistic about lifting guest counts and market share. With fresh moves like McCrispy Chicken Strips and the return of snack wraps, the focus is clear. Value, affordability, and crave-worthy innovation to keep customers coming back.

Meanwhile, analysts monitoring the company remain optimistic, predicting its EPS to be around $12.25 for fiscal 2025, up 4.5% year over year.

What Do Analysts Expect for McDonald’s Stock?

While analysts from Morgan Stanley have expressed concerns about McDonald’s, highlighting broader pressures on the fast-food sector, “Mad Money” host Jim Cramer remains confident in the company’s adaptability.

He pointed to McDonald’s swift response to customer complaints about high prices by launching a popular discount meal. Cramer emphasized that the company’s strength lies in its pragmatic approach. When a product fails, McDonald’s doesn’t hesitate to abandon it and pivot quickly to what works.

McDonald’s stock has a consensus “Moderate Buy” rating overall, which demonstrates confidence. Out of 34 analysts covering this stock, 13 recommend a “Strong Buy,” two advise a “Moderate Buy,” 18 analysts stay cautious with a “Hold” rating, and one analyst has a “Strong Sell” rating.

The average analyst price target for MCD is $334.07, indicating potential upside of 17%. The Street-high target price of $370 suggests that the stock could rally as much as 30%.