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McDonald's Jumps 21.4% in a Month, but Can MCD Keep Climbing Higher?
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Key Takeaways
McDonald's shares surged 21.4% in four weeks, supported by stronger earnings and international sales growth.
Third-quarter adjusted EPS rose 11% to $3.57, while global comparable sales increased 1.5%.
Weak U.S. traffic, inflation and competition challenge growth despite 2,500 planned openings in 2026.
McDonald's Corporation (MCD - Free Report) shares climbed 21.4% over the past four weeks, putting the recent rally in focus for investors. The move comes as third-quarter earnings improved and international sales remained positive.
Still, the operating picture is uneven. U.S. comparable sales slipped, guest counts stayed negative and inflation continues to pressure restaurant economics, leaving the stock's next leg dependent on execution rather than momentum alone.
McDonald's Monthlong Rally Faces a Tougher Test
The recent advance has been concentrated. MCD gained 21.4% over four weeks, while its 12-week increase was only 1.6%, showing how quickly sentiment shifted after a much flatter three-month stretch.
That distinction matters because the business has not improved uniformly. Systemwide sales rose 4% in the third quarter and new restaurant openings contributed to growth, but softer U.S. demand and cost pressure remain meaningful offsets.
MCD's Earnings Strength Supports the Recent Momentum
Adjusted earnings were $3.57 per share in the third quarter, up 11% year over year and 6.3% above the Zacks Consensus Estimate of $3.36. Higher sales-driven franchised margins and other operating income supported the bottom line.
Revenues increased 1% to $7.16 billion but missed the consensus mark by 1.7%. The gap between modest revenue growth and faster earnings growth highlights the benefit of McDonald's franchise-heavy model, refranchising gains and operating leverage.
McDonald's Global Growth Offsets U.S. Traffic Weakness
Global comparable sales increased 1.5% in the quarter. International Operated Markets rose 1.4%, led by Germany and Australia, while International Developmental Licensed Markets advanced 4.2%, with Japan leading growth.
The United States moved in the opposite direction, with comparable sales down 0.2% as negative guest counts offset higher average checks. Competitive pressure also remains relevant. Chipotle Mexican Grill, Inc. (CMG - Free Report) reported a 2.1% third-quarter comparable restaurant sales increase and positive transaction growth. Restaurant Brands International Inc. (QSR - Free Report) posted 8.4% comparable sales growth at Burger King U.S. in the same quarter.
MCD's Valuation Leaves Less Room for Execution Slips
McDonald's trades at 20.69X forward 12-month earnings, below the Zacks sub-industry's 23.07X and its own five-year median of 23.65X. The discount gives the shares some valuation support after the recent run.
The Value Score of F, however, indicates that the stock does not screen attractively across the broader set of valuation factors. Soft U.S. traffic, inflation and the need to sustain value offerings keep the lower earnings multiple from automatically becoming a compelling value case.
MCD's Mixed Signals Temper the Rally
The 21.4% four-week rise has support from better earnings, international growth and continued restaurant expansion, but the operating setup remains mixed. McDonald's expects roughly 2,500 gross openings and about 2,100 net additions in 2026, while U.S. traffic recovery is still a work in progress.
The stock currently carries a Zacks Rank #4 (Sell) and a VGM Score of D. Its Growth Score of B points to comparatively favorable growth characteristics, while the Value Score of F and Momentum Score of D are less supportive. Taken together, the current Rank and Style Scores suggest that improving earnings growth has not yet translated into a broadly favorable near-term investment profile.
View the Zacks #1 Rank List
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McDonald's Jumps 21.4% in a Month, but Can MCD Keep Climbing Higher?
Key Takeaways
McDonald's Corporation (MCD - Free Report) shares climbed 21.4% over the past four weeks, putting the recent rally in focus for investors. The move comes as third-quarter earnings improved and international sales remained positive.
Still, the operating picture is uneven. U.S. comparable sales slipped, guest counts stayed negative and inflation continues to pressure restaurant economics, leaving the stock's next leg dependent on execution rather than momentum alone.
McDonald's Monthlong Rally Faces a Tougher Test
The recent advance has been concentrated. MCD gained 21.4% over four weeks, while its 12-week increase was only 1.6%, showing how quickly sentiment shifted after a much flatter three-month stretch.
McDonald's Corporation Price and Consensus
McDonald's Corporation price-consensus-chart | McDonald's Corporation Quote
That distinction matters because the business has not improved uniformly. Systemwide sales rose 4% in the third quarter and new restaurant openings contributed to growth, but softer U.S. demand and cost pressure remain meaningful offsets.
MCD's Earnings Strength Supports the Recent Momentum
Adjusted earnings were $3.57 per share in the third quarter, up 11% year over year and 6.3% above the Zacks Consensus Estimate of $3.36. Higher sales-driven franchised margins and other operating income supported the bottom line.
Revenues increased 1% to $7.16 billion but missed the consensus mark by 1.7%. The gap between modest revenue growth and faster earnings growth highlights the benefit of McDonald's franchise-heavy model, refranchising gains and operating leverage.
McDonald's Global Growth Offsets U.S. Traffic Weakness
Global comparable sales increased 1.5% in the quarter. International Operated Markets rose 1.4%, led by Germany and Australia, while International Developmental Licensed Markets advanced 4.2%, with Japan leading growth.
The United States moved in the opposite direction, with comparable sales down 0.2% as negative guest counts offset higher average checks. Competitive pressure also remains relevant. Chipotle Mexican Grill, Inc. (CMG - Free Report) reported a 2.1% third-quarter comparable restaurant sales increase and positive transaction growth. Restaurant Brands International Inc. (QSR - Free Report) posted 8.4% comparable sales growth at Burger King U.S. in the same quarter.
MCD's Valuation Leaves Less Room for Execution Slips
McDonald's trades at 20.69X forward 12-month earnings, below the Zacks sub-industry's 23.07X and its own five-year median of 23.65X. The discount gives the shares some valuation support after the recent run.
The Value Score of F, however, indicates that the stock does not screen attractively across the broader set of valuation factors. Soft U.S. traffic, inflation and the need to sustain value offerings keep the lower earnings multiple from automatically becoming a compelling value case.
MCD's Mixed Signals Temper the Rally
The 21.4% four-week rise has support from better earnings, international growth and continued restaurant expansion, but the operating setup remains mixed. McDonald's expects roughly 2,500 gross openings and about 2,100 net additions in 2026, while U.S. traffic recovery is still a work in progress.
The stock currently carries a Zacks Rank #4 (Sell) and a VGM Score of D. Its Growth Score of B points to comparatively favorable growth characteristics, while the Value Score of F and Momentum Score of D are less supportive. Taken together, the current Rank and Style Scores suggest that improving earnings growth has not yet translated into a broadly favorable near-term investment profile.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.