NEW YORK, August 1, 2026, 15:09 EDT
- U.S. markets remain shut during the weekend. McDonald’s finished Friday at $270.64, up 2.2% over the past week.
- According to FactSet Research Systems NYSE:FDS, the earnings forecast for the second quarter has declined by 2.9% over the past three months.
- Early estimates suggest revenue of $7.14 billion and adjusted earnings at $3.32 per share.
Shares of McDonald’s Corporation NYSE:MCD rose 2.2% last week despite a decline in profit projections. The company’s quarterly report on Tuesday will reveal if the stock’s recovery outpaces expectations for earnings.
The stock outperformed both the S&P 500 and the Dow Jones Industrial Average, with each index up roughly 1% for the week. McDonald’s shares increased 0.8% on Friday.
Data from Friday’s close highlight the disparity.
| Instrument | July 24 close | July 31 close | Weekly change |
|---|---|---|---|
| McDonald’s | $264.76 | $270.64 | up 2.2% |
| S&P 500 | 7,411.98 | 7,489.72 | up 1.0% |
| Dow Jones Industrial Average | 51,947.25 | 52,485.03 | up 1.0% |
McDonald’s ended trading on Friday with a valuation close to 21 times its projected 2026 earnings. The consensus analyst price target from FactSet, averaging $322.14, indicates potential upside of about 19%. On Friday, Mizuho Securities maintained its Neutral rating but lowered its price target to $290 from $300.
The main concern for investors is that the forecast reductions go beyond just this quarter.
| Earnings measure | Three months ago | Current estimate | Revision |
|---|---|---|---|
| Q2 2026 adjusted EPS | $3.42 | $3.32 | -2.9% |
| Q3 2026 adjusted EPS | $3.58 | $3.42 | -4.5% |
| Full-year 2026 EPS | $13.18 | $12.90 | -2.1% |
The third-quarter forecast has seen the largest downgrade. Investors may put greater weight on management’s guidance than a slim quarterly outperformance. Even an improved second quarter might not stop additional downgrades.
Initial consensus continues to indicate annual growth. The benchmark appears low compared to the stock’s recent movement.
| Metric | Q2 2025 actual | Q2 2026 preliminary consensus | Implied growth |
|---|---|---|---|
| Revenue | $6.84 billion | $7.14 billion | +4.3% |
| Adjusted EPS | $3.19 | $3.32 | +4.1% |
McDonald’s posted a 3.8% increase in global comparable sales during the second quarter last year. U.S. comparable sales were up 2.5%.
The main variable continues to be U.S. demand. Comparable sales rose 3.9% in the first quarter, but management reported that April sales edged into negative territory. Chief Executive Chris Kempczinski stated, “Elevated gas prices are the core issue we’re seeing right now.” McDonald’s Corporation
Margin performance remains important. In the first quarter, U.S. company-operated restaurant margin dollars declined by 25% to $59 million. CFRA analyst Alex Fasciano noted that the challenges related to traffic and fuel were “well understood by investors.” Reuters
Recent peer reviews provide a varied standard.
| Company and period | Comparable-sales signal | Traffic or current signal | Margin or next catalyst |
|---|---|---|---|
| McDonald’s, Q1 2026 | U.S. up 3.9% | April sales trend slightly negative | U.S. margin dollars fall 25% |
| Yum! Brands NYSE:YUM, Taco Bell Q2 | Increase of 7.0% | Early Q3 sales off 2% due to an outbreak | U.S. company-operated margin 26.2% |
| Chipotle Mexican Grill NYSE:CMG, Q2 | Up 2.2% | Transactions rise 1.0% | Restaurant margin slipped 220 basis points |
| Restaurant Brands International NYSE:QSR | Q1 overall up 3.2% | Q2 numbers pending | Results expected August 6 at 08:30 EDT |
The comparisons highlight that sales gains may not be enough on their own. Chipotle regained transaction growth, but its restaurant-level margin declined. Taco Bell saw higher sales, though it faced a brief dip in July.
McDonald’s is scheduled to release its report on Tuesday, August 4. Restaurant Brands will report on Thursday, providing fresh insight into value-focused demand and the state of franchise economics.
Risks: Robust U.S. traffic and consistent margins could lead to a reversal of the estimate reductions. Ongoing discounting, elevated fuel expenses, or reduced franchisee cash flow may weigh on the valuation.
Investors are advised to focus on transaction volumes in addition to average check sizes. A rise driven by increased customer traffic would provide firmer proof of a turnaround. If gains are led mostly by pricing, key questions would remain unanswered.
