McDonald’s could present itself as a stronger investment compared with its fast-food peers, according to analysts at Citi.
The bank raised its price target on the fast food giant to $381 per share from $373, representing an implied upside of 26%.
Analyst Jon Tower also reiterated his buy rating on McDonald’s stock, now holding the highest price target on Wall Street among those covering the company.
McDonald’s share was up by 0.49% in premarket trading.
Short-term tailwinds for McDonald’s
Tower pointed to a combination of factors that could support the company’s performance in the near term.
These include aggressive value promotions, elevated marketing spend, and favorable comparisons from prior periods.
Together, these dynamics could allow McDonald’s to expand its price-to-earnings multiple, the analyst noted.
McDonald’s has also committed to maintaining nationally advertised price points by subsidizing net profit losses in higher-cost markets, according to Tower.
This strategy could provide the company with a competitive advantage over rivals that are more exposed to pricing pressures.
“They have not committed to anything beyond this, but we believe it could present a new construct that MCD could uniquely execute going forward,” Tower wrote.
Longer-term growth drivers
Looking further ahead, Citi sees McDonald’s benefiting from a new round of multi-year growth initiatives beginning in 2026.
These include expanded beverage offerings — particularly in the energy drink category — a remodel cycle, and an acceleration in unit growth.
At the same time, Tower highlighted that many of McDonald’s peers are facing mounting headwinds.
Competitors are experiencing high single-digit to low double-digit declines in traffic, levels not seen since the peak of the global financial crisis.
These challenges could lead to additional unit closures, potentially accelerating a negative feedback loop for franchisees.
In that environment, Tower argued, McDonald’s would be well positioned to capture market share, as “significant dollars” could shift toward the company in the wake of peer closures.
Competitive landscape and market impact
The fast food industry has faced a challenging operating environment in 2025, with inflation, shifting consumer preferences, and rising costs pressuring operators.
While many competitors are seeing declining traffic and profitability, McDonald’s ability to sustain value-driven promotions while absorbing margin pressure could differentiate it in the sector.
Tower suggested that this dual approach — focusing on value in the near term while preparing for structural growth initiatives in the medium term — places McDonald’s in a stronger position relative to rivals.
The combination of steady customer traffic, upcoming product and unit expansion, and peers’ structural weaknesses could allow the company to consolidate its leadership further.
Shares of McDonald’s have risen about 5% so far this year.
With Citi’s new $381 price target, the stock may gain momentum as investors reassess its relative strength in a pressured industry landscape.
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