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McDonald's Results Show Fast-Food Giant Not Immune to Macro Challenges, RBC Says

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-- McDonald's (MCD) delivered strong first-quarter results against a low bar, though there were signs that the fast-food giant is not immune to macroeconomic challenges, RBC Capital Markets said in a note e-mailed Friday.

On Thursday, McDonald's reported better-than-expected results for the March quarter, with comparable sales rebounding more than market estimates despite what the company described as a "challenging" environment.

While quick service restaurant industry traffic contracted in many of McDonald's top international markets, the company managed to gain market share in nearly all of them, led by the UK, Germany, and Australia, Chief Financial Officer Ian Borden said on an earnings conference call Thursday, according to a FactSet transcript.

"These three markets continue to demonstrate disciplined execution across value, menu, and marketing, with each market gaining share again this quarter and delivering comparable sales growth in the mid- to high-single-digit percent range," Borden told analysts.

Overall comparable sales for the quarter were likely above buy-side, while the company also gained share among low-income US consumers amid its value offerings, RBC said in a the note to clients.

"While management still expects acceleration on a two-year basis for (the second quarter), April comps for US and (international operated markets) were slightly negative as macro headwinds weighed on the consumer, particularly in the US, while Minecraft lap is impacting IOM markets," RBC analyst Logan Reich said.

The brokerage lowered its price target on the McDonald's stock to $305 from $330, with a sector perform rating.

The company's shares were down 1.6% in Friday afternoon trade. The stock has lost 8.7% in value so far this year.

RBC reduced its 2026 and 2027 adjusted earnings and revenue estimates for McDonald's.

The brokerage cut the company's comparable sales estimates for this year "across the board" as heightened macro uncertainty weighs on top-line growth expectations, it said in the note. "Higher construction costs and franchisee profitability headwinds could limit unit growth in (2027) and beyond."

Price: $280.62, Change: $-3.08, Percent Change: -1.09%

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