McDonald’s Stock Poised for 25%+ Upside as Citi Raises Price Target to $381

Analysts cite value initiatives, store remodels & multiple expansion as catalysts

Citigroup raised its price target on McDonald’s (MCD) from $373 to $381, the highest among Wall Street analysts tracking the company, implying a potential upside of ~26% from recent trading levels.

What’s Driving Citi’s Bullish Outlook

• Citi sees McDonald’s value-meal promotions and “easy comparisons” from past periods as helping to revive customer traffic.
• A planned cycle of store remodels and expansion of new units is expected to support margin and growth in 2026.
• Investors may also benefit from multiple expansion if McDonald’s can deliver stronger comp sales and improved profitability.

Market Implications & Investor Sentiment

• Stock reaction: Shares rose modestly in pre-market trade after the upgrade. The valuation bump could attract investors seeking stable, well-known consumer-food names with pricing power.
• Retail & comparable names: Other fast-food chains may face competitive pressure, especially those less able to offer value meals or remodel stores. McDonald’s could regain a share of wallet among cost-sensitive consumers.
• Margin risk: Value promotions are costly. The balance between discounting to drive traffic vs protecting margins will be critical. Inflation of input costs (food, labor, energy) remains a headwind.

Key Risks & Things to Watch

• If cost pressures (especially food, labor) increase, McDonald’s could see margin compression even if sales rise.
• Whether promised growth in 2026, store remodels & new units, happens on schedule; delays could dent expectations.
• Consumer sentiment in the U.S. remains sensitive to economic conditions; high inflation or interest rates could lower discretionary spending in the quick-service sector.
• Comparisons become tougher later if value offerings are scaled back or discount fatigue sets in.

In summary, Citi’s newly elevated $381 price target on McDonald’s reflects increasing confidence in its value meal strategy, store improvements, and capacity for multiple expansion. While there is clear upside, margins and execution remain central. The core theme: McDonald’s is viewed by analysts at Citi as having renewed growth potential, provided cost control and strategic initiatives come through.