McDonald’s Stock Fell 4.8% Amid Investor Day; CFO Puts NEXT Company Payback at 5–6 Years

McDonald’s Corporation (NYSE: MCD) shares fell 4.81% on September 23 during the company’s Investor Day as management detailed its McDonald’s > NEXT strategy, including roughly $8.5 billion in franchisee partnering support through 2036.

The company also outlined separate payback expectations for McDonald’s and its franchisees under the Restaurant > NEXT program. Chief Financial Officer Ian Borden said McDonald’s expects an approximately five-to-six-year payback on its holistic Restaurant > NEXT investments, according to a same-day transcript of the event. Management said that period is consistent with previous significant growth initiatives.

For franchisees, the expected payback is shorter. McDonald’s said franchisees are expected to achieve an approximately four-year payback on their holistic Restaurant > NEXT investment after company partnering support, according to the company’s SEC-filed Investor Day release. The two estimates therefore apply to different sides of the investment: roughly four years for franchisees after McDonald’s support and approximately five to six years for McDonald’s own investment.

McDonald’s closed at $238.32, down $12.03, after trading between $234.03 and $250.32. Volume reached approximately 16.33 million shares, compared with about 4.96 million on September 22 and 5.88 million on September 21.

The following day, at least six firms lowered their McDonald’s price targets while maintaining their existing ratings.

McDonald’s Plans $8.5 Billion of NEXT Partnering Support

McDonald’s said it expects to provide approximately $8.5 billion of Restaurant > NEXT partnering support through 2036, including about $5 billion through 2030.

The support will include rent relief and capital assistance intended to accelerate restaurant modernization, technology deployment, and operational improvements across the system.

For a traditional U.S. drive-thru restaurant, the full incremental Restaurant > NEXT investment is expected to total roughly $800,000, according to the Investor Day transcript. That spending is in addition to a standard required lobby remodel, which management estimated at approximately $400,000 to $450,000.

Management said franchisees are responsible for funding the standard lobby remodel under their franchise agreements, while McDonald’s will partner on a portion of the incremental Restaurant > NEXT investment. The level of company support will vary by market.

During the question-and-answer session, management said the $8.5 billion partnering commitment represents a cash figure. The related accounting expense is expected to be amortized over the remaining terms of applicable franchise agreements, which Borden said average roughly 10 years.

Restaurant > NEXT Targets 250 Basis Points of Efficiency Gains

McDonald’s said Restaurant > NEXT is expected to generate approximately 250 basis points of gross restaurant-level efficiency gains.

The company estimates those efficiencies could generate roughly $100,000 in incremental annual cash flow for the average U.S. restaurant, much of which is expected to flow to the restaurant’s bottom line over time.

At the company level, McDonald’s is targeting a low-to-mid-50% adjusted operating margin by 2030 and free-cash-flow conversion in the mid-to-high-80% range.

On capital spending, the company expects approximately $3 billion in annual baseline capital expenditures from 2027 through 2030, along with about $1.5 billion to $2 billion in cumulative capital partnering support during that period.

Separately, management said returns on new McDonald’s restaurants are expected to be in the high-teens percentage range over a typical 20-year period.

McDonald’s Expects Slightly Negative U.S. Comparable Sales for Q3

McDonald’s also expects a challenging demand environment as elevated inflation continues to weigh on industry traffic.

Chief Executive Chris Kempczinski said McDonald’s expects industry traffic growth in its wholly owned markets to remain flat while inflation remains elevated.

During the Investor Day Q&A, Borden said the U.S. business was slightly negative in July and August, while September was expected to be positive. Despite that expected improvement, he said U.S. comparable sales were expected to be slightly negative for the third quarter because of the slower start.

In the second quarter, McDonald’s U.S. comparable sales increased 0.8%. The company’s quarterly filing attributed the increase to higher average checks and a favorable product mix, partially offset by a decline in comparable guest counts.

McDonald’s has not yet announced a date for its third-quarter earnings release.

McDonald’s Shares Underperformed Major Indexes on September 23

The broader U.S. equity market also declined on September 23, although the major indexes posted smaller losses than McDonald’s.

The S&P 500 fell about 0.75%, the Nasdaq Composite dropped roughly 1.13%, and the Dow Jones Industrial Average declined about 0.68%.

Restaurant stocks were mixed during the session. Wendy’s fell about 1.2%, while Yum! Brands gained roughly 0.7%.

A tokenized product tracking McDonald’s stock also declined. McDonald’s xStock (MCDX), a third-party tokenized tracker certificate issued by Backed Assets (JE) Limited, was trading at $244.65, down 4.6% over the previous 24 hours, according to CoinMarketCap.

CoinMarketCap showed approximately 9,100 MCDX tokens in circulation and a market capitalization of about $2.22 million. MCDX is distinct from McDonald’s NYSE-listed MCD common stock and is not issued by McDonald’s Corporation. Backed identifies McDonald’s Corporation as the issuer of the underlying MCD security, while Backed Assets (JE) Limited is the issuer of MCDX.

Analysts Cut McDonald’s Price Targets Following Investor Day

On September 24, at least six firms lowered their McDonald’s price targets following Investor Day while maintaining their existing ratings.

JPMorgan cut its target to $260 from $280 and maintained an Overweight rating. Citigroup lowered its target to $305 from $310 while maintaining Buy, and Gordon Haskett reduced its target to $285 from $315 while keeping its Buy rating.

TD Cowen lowered its target to $270 from $282 and maintained Hold. Evercore ISI cut its target to $300 from $320 while maintaining Outperform, while BMO Capital reduced its target to $310 from $335 and kept its Outperform rating.

TD Cowen cited uncertainty around the recovery timeline and visibility into earnings growth during the 2027-to-2030 period.