McDonald's is about to serve up a messy quarter, but one major Wall Street bank thinks the fast-food giant's longer-term recipe could still win over investors. UBS expects the company to report a 0.8% decline in US same-store sales when it announces third-quarter results on November 4th—a figure that would come in below what analysts broadly are forecasting.
Same-store sales, also called comparable sales, measure revenue at locations that have been open for at least a year. It's a key gauge of a restaurant chain's health because it strips out the effect of opening new restaurants. A decline means fewer customers or smaller checks at existing outlets.
Despite the expected near-term stumble, UBS remains upbeat about McDonald's prospects. The bank says the world's biggest burger chain still has "defensive" appeal: when budgets get tight, many consumers trade down to cheaper meals rather than giving up restaurant visits altogether. That resilience, UBS argues, should help McDonald's hold up better than some rivals during economic uncertainty.
Why the next few months look tough
UBS warns that the weak comparison could extend into the fourth quarter. That's because McDonald's will be measuring its performance against last year's limited-time promotions, including the Monopoly game and the Grinch Meal. Those one-off offers made for strong sales in the year-ago period, making this year's numbers look weaker by comparison.
The bank's optimism starts later, as the company rolls out its NEXT growth strategy. That plan includes more frequent menu updates, sharper value deals, and a bigger push on its loyalty program. UBS models US same-store sales growth of 0.6% in 2026 and 2.2% in 2027, suggesting the strategy could help McDonald's win back market share.
For context, McDonald's has been under pressure as inflation-weary consumers pull back on discretionary spending. Rivals like Burger King and Wendy's have also stepped up their value offerings, intensifying competition in the fast-food space. A successful NEXT rollout could help McDonald's differentiate itself and regain momentum.
What it means for investors
UBS kept its price target on McDonald's stock at $320, even though the shares recently traded around $242.79. That implies a potential upside of more than 30%, but the bank notes that the path there isn't linear.
A quarter with falling same-store sales often prompts analysts to trim their earnings forecasts for the next 12 months. That's because a weaker sales base can ripple through margins and profit expectations. When that happens, the stock's valuation becomes more important: investors start asking whether the longer-term growth story justifies a higher price-to-earnings multiple even if the next few quarters are soft.
That's why the market reaction around the Q3 release may hinge less on the -0.8% print and more on management's confidence in the NEXT rollout. If executives can show traction in value offers, loyalty engagement, and menu changes, investors may be willing to look through near-term pressure and price in the 2026-2027 re-acceleration UBS is counting on.
For everyday investors, the takeaway is about patience. McDonald's is a mature, dividend-paying company, and its stock tends to be seen as a defensive holding. But even defensive stocks go through rough patches. The key question is whether the company can execute on its strategy to win back customers and grow sales again.
As always, it's worth remembering that analyst forecasts are just one view. UBS's $320 target is a bet on the NEXT plan working as hoped. If the rollout stumbles, or if consumer spending weakens further, that target could prove too optimistic. Conversely, if the strategy gains traction faster than expected, the stock could outperform.
Investors will get more clarity on November 4th, when McDonald's reports its full third-quarter results and likely offers guidance on the fourth quarter. Until then, the market will be watching for any signs of how the NEXT plan is being received by customers.
For more on how global markets are reacting to earnings and economic news, check out our coverage of European shares slipping and bank shares sliding.
