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Should You Buy McDonald’s (NYSE: MCD) Shares? 3 Reasons Investors Are Lovin’ It
McDonald’s hardly needs an introduction. As the world’s largest fast-food chain, it has stood the test of time and economic downturns. From the global financial crisis to the recent post-COVID landscape, the Golden Arches have proven surprisingly resilient. But is McDonald’s stock (NYSE: MCD) a smart buy right now?
Let’s break it down — the company’s current situation, its growth drivers, and why many investors still believe in its long-term potential.
A Quick Look at McDonald’s
Founded in the 1950s, McDonald’s grew from a small burger joint into a global powerhouse with over 40,000 restaurants serving around 65 million customers daily. Its franchise model — where franchisees pay royalties, rent, and upfront fees — has allowed the company to generate consistent cash flow with relatively low operational risk at the corporate level.
Today, McDonald’s is not just a fast-food brand; it’s a real estate giant with strategic locations worldwide. Australia, for instance, is its fourth-largest market, with 1,000+ outlets and over 100,000 employees.
3 Reasons McDonald’s Shares Look Attractive
Strong Global Expansion Plans
McDonald’s aims to reach 50,000 restaurants by 2027, its fastest growth phase in history. This includes 2,000+ new locations per year and a major push in emerging markets. In Australia alone, 100 new stores are in the pipeline, with one-third in regional areas.
Resilient Financial Performance
Despite rising costs — wages up 40% and food costs up 35% since 2019 — McDonald’s managed to maintain strong margins. Global sales topped US$130 billion in 2024, with loyalty programs contributing over US$30 billion. Q2 2025 sales grew 3.8%, with international markets outperforming the US.
Digital & Delivery Growth
Through its “4 Ds” strategy — Development, Digital, Delivery, and Drive-Thru — McDonald’s continues to focus on convenience and customer loyalty. Delivery is now available in 85% of its outlets globally, and its 90-day active loyalty members are projected to rise from 150M to 250M in the next few years.
Challenges Investors Should Note
Pricing Pressures: Rising menu prices have sparked criticism, with some customers calling fast food a “luxury.”
Geopolitical Risks: Store closures in conflict zones (Ukraine, Middle East) and trade tensions (e.g., US tariffs) have impacted growth.
Competition: Rival chains like Burger King, Domino’s, and even retailers like Walmart are encroaching on value-conscious consumers.
Is McDonald’s Stock a Buy?
Analysts forecast US$26.7B in revenue for 2025 (+3%) and $12.33 EPS (+7%), with a forward P/E of around 23.4x — slightly below peers like Starbucks (35x) and Chipotle (32x). With a consensus target price of $334 (about 7% upside), McDonald’s isn’t “cheap,” but it offers stability, brand dominance, and steady growth potential.
For long-term investors seeking a reliable dividend payer with global expansion upside, McDonald’s remains a solid, defensive pick.