McDonald's Corporation MCD is trading above its 50-day and 200-day simple moving averages (SMAs), signaling a bullish trend. On Monday, the stock’s closing price of $316.07 was above its 50-day moving average of $305.19 and the 200-day moving average of $288.64.

Despite the market volatility and cautious sentiment due to macroeconomic uncertainty, including tariff concerns and potential recession risks, investors have been optimistic about McDonald's. The company has been gaining from internal efforts focused on its Accelerating the Arches plan, introducing menu items, offering better value deals and expanding its presence across the global markets.

McDonald's 50 & 200-Day SMAs

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Over the past three months, MCD shares have gained 13% compared the Zacks Retail - Restaurants industry’s 0.6% rise. Over the same period, the stock has fared better than the broader Zacks Retail-Wholesale sector’s 6.9% dip and the S&P 500 index’s 9.3% decline.

MCD Stock’s Past 3 Months’ Price Performance

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The MCD stock has outperformed some industry players in the past three months, including Restaurant Brands International Inc. QSR, The Wendy's Company WEN and Chipotle Mexican Grill CMG. In the said time frame, shares of Restaurant Brands have gained 4.2%, while Wendy's and Chipotle have tumbled 12.6% and 14%, respectively.

Can McDonald's recent performance signal a continued upward trajectory? Let us explore the key factors that can drive the stock's growth and strengthen investor confidence in the near term.

McDonald's Global Expansion Strategy

MCD is focused on expanding its global presence, aiming to enhance growth through the latest openings and upgrades to existing locations. This strategy supports the company’s continued performance despite challenging conditions. In 2024, McDonald's opened 2,116 restaurants, an increase from 2,067 in 2023. This growth reflects the company’s focus on expanding its global footprint through the Restaurant Development pillar of its Accelerating the Arches Strategy.

Going forward, McDonald's aims to accelerate its pace of restaurant openings to meet growing demand across key markets. In 2025, the company plans to open 2,200 restaurants globally, contributing more than 4% to new unit growth, net of closures. It continues to build on its industry-leading development, targeting 50,000 restaurants by the end of 2027, marking the fastest growth phase in its history.

MCD’s Focus on Menu Innovation & Delivery Enhancements

McDonald's continues to strengthen its brand by enhancing core menu offerings and improving customer experience. With a focus on value, variety and operational efficiency, the company is working to boost customer engagement and drive long-term growth. In January 2025, MCD launched the McValue platform in the United States, designed to provide customers with more flexible options and consistent value.

MCD is enhancing its delivery services to provide greater convenience and improve the customer experience. With an emphasis on expanding delivery options and strengthening digital capabilities, the company is focused on creating seamless ways for customers to access its offerings.

Over the past year, the delivery sales mix has doubled in Australia, Canada and the United States. McDonald's expects to increase the percentage of system-wide delivery sales originating from its mobile app to 30% by 2027.

MCD’s Loyalty Program and Digital Innovation

McDonald's is leveraging its loyalty program and digital initiatives to drive customer retention and expand its base. By enhancing the customer experience across multiple channels, the company is creating more value for loyalty members and increasing engagement through innovative digital solutions.

Since launching its loyalty program, MCD has seen significant growth, with more than 170 million 90-day active users. In 2024, sales to loyalty members reached $30 billion. With the continued rise in digital adoption, McDonald's is optimistic about the long-term success of its loyalty program. The company expects to expand its active user base to 250 million and achieve $45 billion in annual sales by 2027.

Analysts Project Upside for McDonald's

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Analysts are becoming more optimistic about MCD’s earnings outlook. Over the past 30 days, the Zacks Consensus Estimate for McDonald's 2025 EPS has increased from $12.23 to $12.25, implying a 4.5% year-over-year increase. The momentum is set to continue into 2026, with earnings anticipated to climb 8.2% year over year to $13.25 per share.

MCD Stock Trades at a Premium

McDonald's is currently valued at a premium compared with its industry on a forward 12-month price-to-earnings basis. The company’s forward 12-month P/E ratio stands at 25.21X, slightly higher than the industry’s average of 25.12X. The premium valuation reflects the company’s consistent performance, strong position in key markets and earnings growth potential. Meanwhile, Restaurant Brands, Wendy's and Chipotle are trading at P/E ratios of 16.61X, 12.83X, and 36.81X, respectively.

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Should You Buy, Sell or Hold McDonald's Stock?

Given MCD's strong global expansion strategy, focus on menu innovation and digital initiatives, the company is well-positioned for continued growth. Restaurant openings, digital enhancements and the successful loyalty program show promising long-term prospects.

However, the company is facing challenges with weaker comparable store sales growth, as global comps edged down 0.1% in 2024 against 9% growth in the prior year. Additionally, macroeconomic uncertainty and market volatility could weigh on short-term performance.

Considering McDonald's Zacks Rank #3 (Hold), investors may want to stay cautious while monitoring the company's ability to capitalize on its growth opportunities in the coming quarters. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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McDonald's Corporation (MCD) : Free Stock Analysis Report

Chipotle Mexican Grill, Inc. (CMG) : Free Stock Analysis Report

The Wendy's Company (WEN) : Free Stock Analysis Report

Restaurant Brands International Inc. (QSR) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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