McDonald's Corporation (NYSE: MCD) is trading around $232 a share, a level that puts the stock on track for an eighth straight weekly decline — a losing streak unmatched since the dot-com crash more than two decades ago. The slide has erased roughly a quarter of stock's value so far this year and has prompted a wave of price-target cuts from Wall Street.

Shares touched a fresh 52-week low of $232.05 this week, according to market data reported by Investing.com. The print sits just above yearly bottom of $232.06 and far below the 52-week high of $341.75 — a gap of roughly 32%. The stock is down about 23% over the past year and roughly 24% year to date. Over the last five trading days alone, shares slipped close to 2%. Even the five-year picture is unflattering, with MCD down roughly 5% over that stretch — a sign that most of the damage has been concentrated in the past twelve months.

What's Driving the Decline

Weak U.S. same-store sales are a central part of the story, and the tone from the top has matched: CEO Chris Kempczinski has given a cautious outlook for the business going forward. Same-store sales — a standard gauge of growth at restaurants that are already open — are among the most closely watched numbers for any restaurant operator, which helps explain why the softness here has carried so much weight with investors.

Investors are likewise digesting the company's newly unveiled “NEXT” strategy — an $8.5 billion franchisee support plan that runs through 2036. The program is designed to support restaurant operators over the long run, but it requires heavy spending in the near term. That is weighing on sentiment, since it pushes McDonald's margin targets out to 2030 — a long wait for shareholders who were looking for quicker returns. The plan's timelines do hand investors concrete checkpoints to track, however: near-term spending now, margin targets in 2030, and franchisee support commitments running through 2036.

Several Wall Street firms have trimmed their price targets in the days since the strategy was announced at McDonald's Investor Day:

• Morgan Stanley cut its target to $297 and kept an Equalweight rating.
• Bernstein SocGen Group held a Market Perform rating with a $295 target, pointing to the size of the investment needed and its effect on near-term earnings.
• Baird took the most cautious stance of the group, cutting its target to $250 — the lowest of the batch — while keeping a Neutral rating, citing ongoing pressure on consumer spending and uncertainty around how the new strategy will play out.
• BTIG also lowered its target, moving to $295 while keeping a Buy rating, and flagged sales pressure and the scale of the investment costs involved.
• RBC Capital trimmed its target to $285, maintaining a Sector Perform rating after reviewing McDonald's presentations on growth and margin drivers.

Taken together, the revised targets — ranging from $250 to $297 — all sit above the stock's current price near $232, but each is well below the 52-week high of $341.75, a measure of how quickly Street expectations have come down.

Where Things Stand Now

Not every signal is negative. Some valuation models suggest the stock may be undervalued at current levels, which could appeal to longer-term investors. At the same time, data shows 13 analysts have revised their earnings estimates downward recently — a number worth monitoring as further estimate updates come in. Even so, McDonald's still holds a “GOOD” financial health score by several measures.

The company now carries a market capitalization of around $164 billion — a steep drop from where it stood at its 52-week high.

If shares do not recover by the end of Friday's session, the eighth consecutive weekly loss will be locked in. That would mark the stock's worst stretch in more than 20 years.

Source: CoinCentral