McDonald's Stock Down 19% in 6 Months: Is This a Buying Opportunity?

McDonald’s Corporation (MCD) shares fell 18.9% over six months, underperforming the industry’s 10.1% decline and the S&P 500’s 11.7% gain. Starbucks (SBUX) and Yum! Brands (YUM) also outperformed. The primary concern is U.S. execution. Second-quarter U.S. comparable sales increased just 0.8%, below expectations, while July comparable sales were slightly negative. Only 60% to 65% of U.S. restaurants followed the recommended under-$3 Every Day Affordable Price architecture. Reduced digital offers and the removal of the Buy One, Add One for $1 promotion contributed to roughly two-thirds of the customer-traffic shortfall. The $5 Meal Deal and Extra Value Meals performed well, and base menu prices are below those of nearby competitors. Management plans more national digital flash offers, personalized promotions and marketing focused on proven-value offerings. Simplifying restaurant operations and reducing noncustomer-facing activities should improve service. Marketing execution is expected to strengthen in 2027. International performance provided support. Second-quarter global comparable sales increased 1.3%, systemwide sales rose 4% on a constant-currency basis, International Operated Markets increased 1.5% and International Developmental Licensed Markets rose 1.9%. The new beverage platform is ahead of expectations in the United States, Canada and Germany. More than half of beverage traffic occurs after lunch, with strong food attachment and higher average checks. McDonald’s NEXT will emphasize food taste and quality, hospitality and simpler operations. Productivity opportunities are expected to fund related investments, with more details planned at the September Investor Day. The company moved its 50,000-restaurant target to 2028 from 2027 because of inflationary development costs and pressured consumers, but remains on track for about 2,600 gross openings in 2026. Second-quarter adjusted EPS rose 5% year over year on a constant-currency basis to $3.38. Restaurant margins exceeded $4 billion, and year-to-date adjusted operating margin was 46.9%. Over the past 30 days, Zacks raised its 2026 EPS estimate by 2 cents to $12.88 and cut its 2027 estimate by 10 cents to $13.93. Expected growth is 5.7% and 8.1%, respectively. Revenue forecasts are $28.18 billion and $29.61 billion, up 4.8% and 5.1%. MCD trades at 19.71X forward P/E versus 21.65X for the industry, 34.61X for Starbucks and 21.14X for Yum! Brands. Existing investors may hold, but new investors may await clearer improvement. MCD carries a Zacks Rank #3 (Hold).