Key Facts
• June 10: McDonald’s shares fell in U.S. stock markets.
• Redburn Atlantic downgraded McDonald’s rating from ‘Buy’ to ‘Sell.’
• Redburn cited diet drugs and inflation as key concerns.
• Analyst Chris Lux highlighted increased use of diabetes drugs like Ozempic for weight loss.
• McDonald’s annual sales could drop by $428 million (1% of total sales).
• Low-income and group-focused customers may see a 10% decline over time.
• Lux set McDonald’s target stock price at $260, 15% below June 9’s closing price.
• Wall Street consensus: 22 ‘Buy’ ratings, 18 ‘Hold’ ratings, average target price $332.
• U.S. same-store sales fell 3.6% in Q1 2025, the largest drop since Q2 2020.
• Fast food chains saw customer declines in 40 of the past 43 months.
Summary
McDonald’s shares dropped on June 10 after Redburn Atlantic downgraded its investment rating from ‘Buy’ to ‘Sell,’ citing concerns over changing consumer behavior due to increased use of weight-loss drugs like Ozempic and inflation. Analyst Chris Lux projected a potential $428 million annual sales decline, equivalent to 1% of total sales, with further risks for low-income and group-focused customers. Lux set a $260 target stock price, 15% below the previous closing price, marking the lowest on Wall Street. While McDonald’s U.S. same-store sales fell 3.6% in Q1 2025, the largest drop since 2020, Wall Street remains divided, with 22 ‘Buy’ and 18 ‘Hold’ ratings and an average target price of $332.
