“Ambitious.” That, in a word, is about the only way to describe fast-food titan McDonald’s (NYSE:MCD) plans for the future. As for the only way to describe investors’ response to those plans in a word, it’s “skeptical,” as share prices slipped fractionally in Wednesday afternoon’s trading.
McDonald’s has big goals for the next three years or so. By 2027, it plans to open close to 9,000 new restaurants and add 100 million people to its loyalty program roster. That flies in the face of clear concerns about the larger economy, starting with still-high inflation that’s even hitting McDonald’s place as a value provider in fast food. Then there’s the matter of weight-loss drugs, with several new ones hitting the market and potentially displacing a lot of customers who just aren’t that hungry anymore.
McDonald’s Has Plans to Augment Its Menu
McDonald’s clearly has big aspirations. But is its stomach a match for its eyes here? There’s a possibility that’s so; McDonald’s already has plans to augment its menu, bringing in more chicken dishes and improving its classic burger recipe to be more attractive to customers. It’s inked a partnership with Alphabet (NASDAQ:GOOG) to bring in some artificial intelligence tools to improve its restaurants. Just how, however, remains to be seen.
Plus, there are some other wild card factors to consider. There’s the CosMc restaurant, for example, a McDonald’s spinoff that’s said to have some nostalgic value to it in a “small format” concept. There’s also an “adult Happy Meal” to consider that pulls on nostalgia with a limited edition McNugget Buddy collectible toy.
What is the Future of McDonald’s Stock?
Turning to Wall Street, analysts have a Strong Buy consensus rating on MCD stock based on 23 Buys and five Holds assigned in the past three months, as indicated by the graphic below. After an 8.28% rally in its share price over the past year, the average MCD price target of $311.15 per share implies 8.52% upside potential.
