McDonald’s Stock Hits 2-Year Low as Domino’s Analysts See Up to 35% Upside

• McDonald’s stock has fallen to a two-year low as US comparable sales growth slowed to just 0.8%
• Morningstar sees McDonald’s fair value at $295 and highlights a forward dividend yield of about 2.8%
• Domino’s analyst targets range from $320 to $430, with the highest estimate implying roughly 35% upside from recent levels

McDonald’s stock has slipped to its lowest level in more than two years, but the decline is starting to make the valuation look more interesting. Morningstar recently put McDonald’s among its top dividend stocks, while rival Domino’s stock is drawing a much wider range of analyst targets. Both restaurant stocks are dealing with softer consumer spending, yet Wall Street’s view on where they go next looks surprisingly different once the numbers are lined up.

Also Read: Bitwise Pulls Plug on Dogecoin ETF as DOGE Leads Crypto Market Losses

McDonald’s Stock Gets Cheaper as US Traffic Slows

MCD stock closed around $253.48 on September 9, extending a decline that has pushed the shares to levels last seen more than two years ago. The weakness is not happening without reason. McDonald’s US comparable sales rose just 0.8% in the second quarter, missing the 1.06% growth analysts expected and slowing from 2.5% a year earlier.

Management blamed weaker promotion of value deals and fewer digital offers, with lower-income customers still cutting back on restaurant spending. CEO Chris Kempczinski acknowledged that execution had fallen short during the quarter. Kempczinski said,

“We don’t have a strategy problem, we simply didn’t execute at the level we needed to in the second quarter.”

But Morningstar sees value emerging. Its latest dividend-stock list gives McDonald’s a 4-star rating, and a $295 fair value estimate. At the time of publication, shares were trading about 10% below that level, while the forward dividend yield stood at 2.81%.

Also Read: Bitcoin Price Sits Near $78K as 68% of Supply Turns Profitable, Armstrong Targets $400K

Domino’s Stock Has a Much Wider Target Range

The outlook for DPZ stock is less straightforward. TD Cowen raised its Domino’s target to $320 from $310 while keeping a Hold rating, almost matching the stock’s recent $319.53 price. UBS is more bullish at $385, while Benchmark’s $430 target implies roughly 35% upside.

DPZ stock is currently at $317.30 following a 1.29% drop over the past day. Domino’s also beat second-quarter revenue expectations with $1.194 billion, while US same-store sales edged up 0.1% against expectations for a decline.

This leaves investors with two very different setups. McDonald’s is getting cheaper as sales momentum weakens, while Domino’s already trades near one analyst’s fair value but still has much more aggressive targets sitting above it.

Also Read: New CLARITY Act Text Reshapes DeFi Rules With Ethics Still Unresolved