MW Why McDonald's value meals have turned Goldman Sachs bullish on the stock

By Steve Gelsi

Goldman Sachs's Christine Cho upgrades fast-food giant's stock to buy from neutral, and her $345 price target implies double-digit upside

McDonald's Corp.'s recently introduced daily double burger and the return of snack wraps have prompted mouth-watering comments from Goldman Sachs, which has turned bullish on the fast-food giant's stock.

Analyst Christine Cho raised her rating on the stock (GS) to buy from hold, as she believes it offers a potential double-digit percentage gain over the next 12 months as value meals and new menu items gain traction with price-wary consumers.

"Although stepped-up value competition across the industry may pressure same-store sales growth and margins in near term, we believe [McDonald's] will be able to out-comp its peers and move into an even stronger position within the fast-food industry," Cho said in a research note. ("Out-comp its peers" refers to an outperformance in comparable-store sales, or sales of restaurants open more than a year.)

She reiterated a price target for McDonald's stock of $345, which implies about 15.2% upside from current prices.

McDonald's has managed to grow sales while many of its peers have slowed or fallen into negative territory in recent months, on the initial success of its new McValue platform in January and its McCrispy chicken strips in May, Cho said.

She also cited a return of snack wraps, as well as the daily double burger's addition to its McValue menu items in the U.S.

The company and its peers continue to face macroeconomic pressure on consumers that has reached beyond lower-income consumers to include middle-income households, she said.

This market dynamic, "speaks to the importance going forward of leveraging both value and menu innovation to drive traffic," Cho said.

Also read: Consumers are still struggling as inflation is a problem again, this food company says

McDonald's stock rose 2.2% in afternoon trading Thursday. It has gained 3.3% in 2025, while the Dow Jones Industrial Average DJIA, of which the stock is a member, has tacked on 5.1% this year.

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Separately, Goldman's Cho downgraded Cheesecake Factory Inc.'s stock (CAKE) to neutral from buy, mostly due to the stock's 36% gain so far in 2025. Cho bumped up her stock price target by $1 to $67 a share, which implies 3.7% upside from current levels and is just below the May 3, 2017, record close of $67.09.

"We continue to like the earnings durability that [Cheesecake Factory] offers, including top-line resilience driven by its unique brand proposition of menu diversity that caters to the guest experience as well as above-peer unit growth," Cho said.

She isn't bullish on the stock, however, because she sees "more compelling upside" in other stocks she covers.

-Steve Gelsi

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July 10, 2025 13:44 ET (17:44 GMT)

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