McDonald's gets an upgrade: Goldman advises buying and sees 15% upside potential

Goldman Sachs improved the rating of McDonald's shares, giving a recommendation to buy them. The decision was influenced by successful changes in the menu and the company's focus on marketing. Analysts of the investment bank believe that the new products will help to attract new customers and increase profits in an alarming environment for the industry, when sales growth is slowing down due to the desire of consumers to save money;

Goldman Sachs analyst Christine Cho upgraded McDonald's stock from "hold" to "buy" and reiterated a $345 target price on McDonald's shares, expecting double-digit growth within 12 months, notes MarketWatch. Such a target is about 15% above current quotes. 

Goldman Sachs' key argument was its strong position against the backdrop of declining purchasing power, which now affects not only low-end but also middle-end households. The analyst points out that reasonably priced dishes and menu novelties are in demand among price-sensitive consumers. Specifically, she cited products such as the much-anticipated Snack Wrap chicken roll, which is returning to the menu after a hiatus, McCrispy chicken strips, which appeared in May, and noted the success of the McValue platform, launched in January, and the addition of the burger Daily Double.

While most players in the fast food industry are facing a slowdown or even recession, McDonald's continues to hold steady at 4-5% per year, the bank's analyst explains. The global scale of the business and its marketing resources are also in the company's favor, translates Trading View Goldman's assessment.

According to the bank, a bet on innovation and a revamped menu can not only retain the current audience, but also provide an influx of new customers. According to preliminary data disclosed by the analyst, McDonald's is already winning back market share from other burger brands, and this could reverse the trend of slowing comparable sales growth.

On July 9, investment bank Citi raised its target price on McDonald's shares, though only by $1, from $364 to $365, but reiterated a buy recommendation. He expects the chain's comparable U.S. sales to grow 2% or more in the second half of the year, making the company an attractive investment;

McDonald's maintains a stable dividend policy: the yield is 2.43%, and the series of annual increases has lasted for 49 years, writes Investing.com. According to Citi's assessment, the company will continue to work on product innovation and collaborate with well-known brands, which will give it additional marketing opportunities and allow it to attract customers with favorable offers.

At the same time, Truist Securities raised its target on McDonald's shares to $356 from $350, maintaining a "buy" rating. He also linked hopes for a sales revival to the return of Snacks Wraps.

Nevertheless, after a series of downgrades in June, Wall Street has become more cautious: now most analysts advise to keep McDonald's securities in the portfolio (Hold rating), 19 of them, MarketWatch shows. At the same time, 17 have given a buy recommendation on the stock (Buy and OverWeight), and there is only one sell rating. The consensus target of these analysts is 11% higher than the closing quote on July 10.

The rating upgrade from Goldman came amid generally weak dynamics of McDonald's quotations in 2025. The fast food giant's shares rose 4.3% over the period, behind gains in the Dow Jones (+5.1%) and S&P 500 (+6.5%). At the same time, this performance is slightly beating the restaurant sector ETF (+3.4%). 

Immediately following the upgrade from Goldman, the stock jumped 2.5% on Thursday, July 10, and continued up 0.9% at the open of trading on July 11.

This article was AI-translated and verified by a human editor