Erste Group Bank Expects Reduced Earnings for McDonald’s

McDonald’s Corporation (NYSE:MCD) – Investment analysts at Erste Group Bank dropped their FY2026 earnings per share estimates for McDonald’s in a report released on Thursday, October 8th. Erste Group Bank analyst S. Lingnau now expects that the fast-food giant will post earnings of $12.87 per share for the year, down from their previous forecast of $12.92. The consensus estimate for McDonald’s’ current full-year earnings is $12.84 per share. Erste Group Bank also issued estimates for McDonald’s’ FY2027 earnings at $13.80 EPS.

MCD has been the subject of several other research reports. BMO Capital Markets cut their price objective on McDonald’s from $335.00 to $310.00 and set an “outperform” rating for the company in a report on Thursday, September 24th. Daiwa Securities Group lowered their target price on McDonald’s from $309.00 to $293.00 and set an “outperform” rating on the stock in a report on Thursday, August 6th. Sanford C. Bernstein lowered their target price on McDonald’s from $295.00 to $250.00 and set a “market perform” rating on the stock in a report on Thursday, October 8th. Morgan Stanley dropped their price target on shares of McDonald’s from $308.00 to $297.00 and set an “equal weight” rating on the stock in a research report on Monday, September 28th. Finally, Gordon Haskett dropped their price target on shares of McDonald’s from $315.00 to $285.00 and set a “buy” rating on the stock in a research report on Thursday, September 24th. One equities research analyst has rated the stock with a Strong Buy rating, twenty-two have issued a Buy rating, thirteen have assigned a Hold rating and one has assigned a Sell rating to the company. According to MarketBeat, McDonald’s has an average rating of “Moderate Buy” and a consensus target price of $295.94.

McDonald’s Stock Performance

MCD opened at $238.16 on Tuesday. McDonald’s has a one year low of $229.20 and a one year high of $341.75. The stock’s fifty day moving average is $253.35 and its 200-day moving average is $272.74. The company has a market capitalization of $168.53 billion, a PE ratio of 18.79, a P/E/G ratio of 2.64 and a beta of 0.44.

McDonald’s (NYSE:MCD) last issued its quarterly earnings results on Tuesday, August 4th. The fast-food giant reported $3.38 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $3.32 by $0.06. McDonald’s had a negative return on equity of 572.06% and a net margin of 31.72%. The firm had revenue of $7.10 billion during the quarter, compared to analyst estimates of $7.13 billion. During the same period last year, the company posted $3.19 EPS. The firm’s quarterly revenue was up 3.7% on a year-over-year basis.

McDonald’s Increases Dividend

The firm also recently declared a quarterly dividend, which will be paid on Tuesday, December 15th. Shareholders of record on Tuesday, December 1st will be given a $1.93 dividend. This represents a $7.72 annualized dividend and a yield of 3.2%. This is a positive change from McDonald’s’s previous quarterly dividend of $1.86. The ex-dividend date is Tuesday, December 1st. McDonald’s’s dividend payout ratio (DPR) is presently 60.44%.

Institutional Inflows and Outflows

Several institutional investors have recently modified their holdings of the stock. Sound Income Strategies LLC increased its holdings in shares of McDonald’s by 0.6% during the 1st quarter. Sound Income Strategies LLC now owns 5,590 shares of the fast-food giant’s stock valued at $1,718,000 after acquiring an additional 35 shares during the last quarter. Jacobsen Capital Management raised its stake in shares of McDonald’s by 2.9% in the 1st quarter. Jacobsen Capital Management now owns 1,267 shares of the fast-food giant’s stock valued at $394,000 after acquiring an additional 36 shares in the last quarter. Sterling Investment Counsel LLC raised its stake in shares of McDonald’s by 0.7% in the 1st quarter. Sterling Investment Counsel LLC now owns 5,303 shares of the fast-food giant’s stock valued at $1,648,000 after acquiring an additional 37 shares in the last quarter. Legacy Wealth Managment LLC ID raised its stake in shares of McDonald’s by 11.0% in the 1st quarter. Legacy Wealth Managment LLC ID now owns 372 shares of the fast-food giant’s stock valued at $116,000 after acquiring an additional 37 shares in the last quarter. Finally, Millstone Evans Group LLC grew its holdings in McDonald’s by 2.5% during the first quarter. Millstone Evans Group LLC now owns 1,532 shares of the fast-food giant’s stock valued at $476,000 after purchasing an additional 38 shares during the last quarter. Institutional investors own 70.29% of the company’s stock.

Trending Headlines about McDonald’s

Here are the key news stories impacting McDonald’s this week:

• Positive Sentiment: Turnaround spending could support long-term sales. McDonald’s has outlined an approximately $8.5 billion franchisee-support and restaurant-modernization plan through 2036. The company is also pursuing more personalized digital offers, value meals and streamlined marketing to improve customer engagement after recent promotions underperformed. McDonald’s Trades at 18 Times Earnings McDonald’s Marketing Reset
• Positive Sentiment: Technology investments may improve operations. Reports describe plans involving AI-powered drive-thru technology, including a system called Archy, as part of the broader restaurant overhaul. Successful deployment could improve speed, labor efficiency and order accuracy, although a previous AI test was discontinued. McDonald’s AI Drive-Thru Overhaul
• Positive Sentiment: Analyst valuation remains above the current share price. A reported consensus target price of $295.94 indicates meaningful potential upside if McDonald’s executes its recovery strategy. McDonald’s Consensus Target Price
• Neutral Sentiment: The latest session’s increase contrasted with a difficult medium-term trend. MCD closed at $238.31 after gaining in the session, but shares have fallen roughly 23% over six months. At about 19 times earnings, investors are weighing a potentially attractive entry valuation against uncertain earnings growth. McDonald’s Increases Despite Market Slip
• Neutral Sentiment: Brand and promotional initiatives continue. McDonald’s is extending grassroots football sponsorships and may bring back Halloween Boo Buckets featuring Disney villains. These efforts could support traffic and brand engagement, but their financial effect is likely limited. McDonald’s Grassroots Football Commitment
• Negative Sentiment: Weak U.S. sales and value-menu execution remain key concerns. Coverage points to softer domestic demand and lower earnings estimates, raising doubts about whether the turnaround investments can produce sufficient returns. Erste Group also modestly reduced its FY2026 and FY2027 EPS forecasts. McDonald’s Stock Down 23 Percent
• Negative Sentiment: Legal and reputational risks add uncertainty. McDonald’s faces a reported class-action lawsuit alleging issues with AI-based menu pricing, while poor customer ratings at individual restaurants could weigh on perceptions of service quality. McDonald’s AI Menu Pricing Lawsuit

McDonald’s Company Profile

McDonald’s Corporation is a global quick-service restaurant company that operates and franchises restaurants under the McDonald’s brand. Its restaurants serve a menu that includes hamburgers, cheeseburgers, chicken sandwiches, French fries, breakfast items, desserts, salads, beverages and coffee. Offerings vary by market, and many locations provide drive-thru service, delivery and digital ordering through the McDonald’s mobile app.

The company operates through a heavily franchised business model, with restaurants owned and operated by independent franchisees, affiliates and the company itself.