McDonald's (MCD) is entering a new investment cycle to defend its global Quick-Service Restaurant market share against specialist QSRs, which will shape the stock's story over the next several years, Morgan Stanley said in a note on Thursday.

The company is moving back into a heavier capital expenditure phase similar to what it did a decade ago with the "Experience of The Future" remodel program, which created a competitive advantage, but eventually, pricing diluted some of that benefit, the firm said.

The upcoming investments are expected to increase capital expenditures, pressure margins, and pose a risk to menu complexity, the firm said.

The firm added that earnings for 2026 and 2027 are expected to come in slightly below its estimates.

Morgan Stanley maintained its equalweight rating and $335 price target on the stock.

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