McDonald’s Corporation (MCD Quick QuoteMCD - Free Report) is trading at a valuation that appears relatively attractive compared with the broader restaurant industry. The company’s forward 12-month P/E multiple of 19.15X is below the industry average of 22.57X, suggesting that investors are taking a more cautious view of the fast-food giant despite its powerful brand, global scale and resilient franchise-driven business model.

P/E (F12M)

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The discount follows a difficult period for the stock. MCD’s shares have declined 20.8% over the past six months, compared with a 10.2% drop for the restaurant industry. The stock has also lagged the S&P 500’s 12% gain, as investors have favored companies with stronger near-term growth prospects. McDonald’s has underperformed restaurant peers including Starbucks Corporation (SBUX Quick QuoteSBUX - Free Report) , Yum! Brands, Inc. (YUM Quick QuoteYUM - Free Report) and Chipotle Mexican Grill, Inc. (CMG Quick QuoteCMG - Free Report) .

Price Performance

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The key question for investors is whether this weakness reflects longer-lasting fundamental concerns or creates an attractive entry point into a globally recognized restaurant leader.

U.S. Weakness Weighs on Performance

McDonald’s second-quarter results highlighted both its strengths and the areas requiring improvement. Global comparable sales increased 1.3%, while systemwide sales rose 4% in constant currency. Adjusted EPS came in at $3.38, up 5% year over year on a constant-currency basis.

However, the U.S. business remained a key weakness. Comparable sales increased just 0.8% in the quarter, as execution issues affected traffic and customer experience. Management attributed roughly two-thirds of the U.S. traffic shortfall compared with expectations to problems surrounding value execution. The weaker-than-expected impact of the FIFA marketing campaign compounded the underperformance.

The company also acknowledged that restaurant teams were burdened by too many simultaneous product launches, promotions and operational changes. Management plans to simplify restaurant operations and provide crews with greater support, while increasing targeted digital offers and reallocating marketing spending toward proven value programs such as Extra Value Meals.

Importantly, McDonald’s does not view these issues as a fundamental strategy problem. Management believes the primary opportunity is to improve execution, particularly around value, operations and marketing.

International Business Provides Stability

McDonald’s international operations continue to offer an important counterbalance to U.S. weakness. Comparable sales increased 1.5% in International Operated Markets, with Germany, Australia and the United Kingdom performing well. International Developmental Licensed Markets posted 1.9% comparable-sales growth, led by Japan, which delivered its 10th consecutive quarter of positive comparable guest-count growth.

Management expects comparable-sales growth in both international segments to accelerate sequentially in the third quarter, offering a potential source of momentum while the U.S. business works through its execution challenges.

Beverages and McDonald’s NEXT Could Support Growth

One of the more encouraging developments is McDonald’s new beverage platform. Early results in the United States, Canada and Germany exceeded expectations, with beverages generating new occasions, higher guest checks and strong food attachment. More than half of beverage-related traffic is occurring after lunch, while average checks are about 50% above the full-day average.

Longer term, management is positioning McDonald’s NEXT as a growth framework focused on improving food taste and quality, enhancing hospitality, simplifying restaurant operations and strengthening customer engagement. The company expects productivity gains to help fund investments associated with the strategy.
MCD is also maintaining the restaurant expansion plans, although it has pushed the 50,000-restaurant target to 2028 from 2027 because of inflationary development costs and a more pressured consumer environment. McDonald’s still expects to open roughly 2,600 gross restaurants in 2026.

McDonald’s Growth Outlook Remains Encouraging

Analysts continue to see room for earnings growth at McDonald’s, although estimates have been mixed recently. Over the past 30 days, the Zacks Consensus Estimate for 2026 earnings increased 2 cents to $12.87 per share, while the 2027 estimate declined 13 cents to $13.89. Despite the revisions, the estimates imply solid year-over-year EPS growth of 5.5% in 2026 and 7.9% in 2027.

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Revenue expectations also point to continued expansion. The Zacks Consensus Estimate projects revenues of $28.15 billion in 2026 and $29.51 billion in 2027, representing year-over-year growth of 4.7% and 4.8%, respectively. These projections indicate that McDonald’s remains positioned for steady top-line and earnings growth, supported by its global scale, restaurant expansion and ongoing initiatives to strengthen customer traffic and engagement.

Why Investors Should Hold MCD

McDonald’s has strong long-term potential, backed by its powerful brand, global presence and franchise model. Its beverage platform and McDonald’s NEXT strategy could support growth.

However, the U.S. business still faces execution issues in value, operations and marketing. Management is taking steps to address these challenges, but the recovery may take time. Existing investors should hold MCD and wait for clearer signs of improvement. New investors may want to wait before buying, as stronger U.S. traffic and execution would provide greater confidence in the recovery.

MCD currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.