McDonald's Corporation operates and franchises restaurants under the McDonald's brand in the United States and internationally. It offers food and beverages, including hamburgers and cheeseburgers, various chicken sandwiches, fries, shakes, desserts, sundaes, cookies, pies, soft drinks, coffee, and other beverages; and full or limited breakfast, as well as sells various other products during limited-time promotions. The company owns and operates under various structures comprising conventional franchise, developmental license, or affiliate. McDonald's Corporation was founded in 1940 and is based in Chicago, Illinois.

McDonald’s remains a high-quality business with very strong operating profitability, but the market is already paying a premium for it. Gross margin of 57.35%, operating margin of 46.26%, and net margin of 31.62% are noticeably above industry medians and appear sustainable across several recent periods, which supports the company’s valuation as a strong cash-generating asset. ROA of 14.48% and ROI of 22.78% also confirm high efficiency in the use of assets and capital, while revenue, EBITDA, operating profit, and net income remain at elevated levels. At the same time, the trend over the years is more stable than accelerating: quality metrics are not deteriorating, but there is no clear new growth driver either. On the balance sheet side, there is an important risk—negative equity and very high debt load in absolute terms—which makes the financial structure more sensitive to borrowing costs and to a slowdown in operating growth. Liquidity looks acceptable: the quick ratio is above 1, but the current ratio is only around 1.14, meaning the cushion is not excessive. In terms of multiples, the stock looks expensive: P/E is above the industry median, while P/S and P/FCF are especially high, limiting the potential for further valuation expansion without faster earnings and free cash flow growth. P/B is of little use here because of negative equity, so it cannot be interpreted as a classic undervaluation signal. The dividend yield based on the latest data does not look like a strong supporting factor, so the dividend argument for revaluation is limited. Overall, the fundamentals point to a strong business quality that is already reflected in the price, so a moderate cautious downward adjustment is logical for the target forecast. For an investor, this is more a story of stability, defensive cash flows, and quality than of significant upside from current levels.

McDonald's Corporation

Сильный индекс, значительно упал. Быки в растерянности.

Strong index, significantly down. The bulls are confused.

Сильный индекс, значительно вырос. Рынок на стороне быков.

Strong index, significantly up. The market is on the bulls' side.

Средний индекс, значительно вырос. Увеличился приток средств в лонги.

Medium index, significantly up. The inflow of funds into longs has increased.

McDonald’s has strong margins and high efficiency, but its valuation is expensive, and negative equity and high debt limit revaluation potential.

Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in Wynn Resorts Ltd (Symbol: WYNN), where a total volume of 7,853 contracts has been traded thus far today, a contract volume which is representative of approximately 785,300 underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 53.2% of WYNN's average daily trading volume over the past month, of 1.5 million shares. Particularly high volume was seen for the $115 strike call option expiring January 15, 2027, with 2,869 contracts trading so far today, representing approximately 286,900 underlying shares of WYNN. Below is a chart showing WYNN's trailing twelve month trading history, with the $115 strike highlighted in orange:
Turtle Beach Corp (Symbol: TBCH) options are showing a volume of 1,217 contracts thus far today. That number of contracts represents approximately 121,700 underlying shares, working out to a sizeable 50.4% of TBCH's average daily trading volume over the past month, of 241,280 shares. Especially high volume was seen for the $12.50 strike call option expiring October 16, 2026, with 1,015 contracts trading so far today, representing approximately 101,500 underlying shares of TBCH. Below is a chart showing TBCH's trailing twelve month trading history, with the $12.50 strike highlighted in orange:
And McDonald's Corp (Symbol: MCD) saw options trading volume of 23,014 contracts, representing approximately 2.3 million underlying shares or approximately 49.8% of MCD's average daily trading volume over the past month, of 4.6 million shares. Particularly high volume was seen for the $290 strike call option expiring September 18, 2026, with 1,977 contracts trading so far today, representing approximately 197,700 underlying shares of MCD. Below is a chart showing MCD's trailing twelve month trading history, with the $290 strike highlighted in orange:
For the various different available expirations for WYNN options, TBCH options, or MCD options, visit StockOptionsChannel.com.
Further WYNN Research:
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Noteworthy Monday Option Activity: WYNN, TBCH, MCD

The restaurant industry faces significant headwinds.
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Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Domino's Pizza and Starbucks. The Motley Fool recommends the following options: long January 2028 $320 calls on McDonald's and short January 2028 $340 calls on McDonald's. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Best Restaurant Stocks to Buy: Starbucks vs. McDonald's vs. Domino's

Key Points
McDonald's remains a quintessential Berkshire-style business with durable cash flow, pricing power, and a wide moat.
Buffett regretted selling McDonald's, and Greg Abel might reverse that historic mistake.
Investors should focus on Berkshire-quality businesses, regardless of whether Berkshire actually buys McDonald's again.
Warren Buffett has never been shy about the great businesses he let slip through his fingers. One of the most painful was McDonald's (NYSE: MCD), which Berkshire Hathaway (NYSE: BRKB) (NYSE: BRKA) sold in the late 1990s in a move Buffett flatly called "a very big mistake." Berkshire has passed on the stock ever since. I think Greg Abel, Berkshire's new chief executive officer, will eventually buy it back, and the reason is simple: McDonald's is a textbook Berkshire business.
The mold McDonald's fits
Forget the burgers for a moment. McDonald's is best understood as a real estate and royalty machine wearing a fast-food uniform. Roughly 95% of its restaurants are run by franchisees, which means McDonald's itself collects high-margin franchise fees and rent on prime real estate while its operators shoulder the day-to-day risk of running the restaurants. The result is capital-light, remarkably predictable cash flow, exactly the quality Buffett spent his career hunting for.
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Layer on the rest of the checklist and the fit is almost eerie. McDonald's owns one of the most recognized brands on earth, a genuine competitive moat. It has pricing power built over decades. It generates enormous free cash flow. And it has raised its dividend -- which yields about 2.8% -- for nearly 50 consecutive years. A wide moat, durable earnings, dependable and growing cash returns: This is the archetype of the kind of company Berkshire was built to own.
The one that got away
The history stings precisely because Buffett knew all this. At the end of 1996, Berkshire held about 30 million McDonald's shares, a 4.3% stake worth roughly $1.4 billion. Within two years, he had sold, and in his 1998 shareholder letter, he admitted the error in plain language, joking that shareholders would have been better off had he "regularly snuck off to the movies during market hours." That stake would be worth more than $10 billion today, before counting decades of dividends. It is a rare unforced error from the greatest investor of his era, and a reminder that even Buffett sometimes let a wonderful business go.
Why Abel might change that
Here is where the simple reasoning comes in. Abel has shown he is more willing than the famously price-sensitive Buffett to act decisively and pay a fair price for quality, as his recent moves into large, fully valued businesses suggest. Buying McDonald's would require no leap into unfamiliar territory, no wrestling with a business model he does not understand, which is what kept Buffett out of so many technology names. It is a company Berkshire knows well and already wishes it still owned. For a leader looking to put Berkshire's mountain of cash to work in proven, moat-protected businesses, repurchasing the one that got away is about as natural a move as it gets.
The caveat worth naming
To be clear, this is a prediction, not a certainty, and the point is less about guessing Abel's next trade than recognizing what makes a stock Berkshire-worthy. McDonald's is not cheap and Berkshire may well find more compelling values elsewhere. Predictions about any single purchase are educated guesses at best.
Whether Abel actually pulls the trigger, McDonald's is the sort of business long-term investors can own with real confidence: a wide-moat, cash-gushing royalty and real estate operation that even Buffett wished he had never sold. That is the deeper lesson here. Instead of trying to predict Berkshire's next move, study the investing template it uses: durable brands, predictable cash flows, and pricing power, and McDonald's checks every box. If Greg Abel is hunting for Berkshire-worthy consumer businesses, this is the blueprint, and I would not be surprised to see Berkshire own it again.
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Micah Zimmerman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool recommends the following options: long January 2028 $320 calls on McDonald's and short January 2028 $340 calls on McDonald's. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Prediction: Greg Abel Will Buy a Stock That Warren Buffett Spent Decades Passing On for This Simple Reason

Starbucks Corporation SBUX is scheduled to release third-quarter fiscal 2026 results on July 29.
The Zacks Consensus Estimate for SBUX’s third-quarter fiscal 2026 earnings per share (EPS) is pegged at 66 cents, indicating a 32% increase from 50 cents reported in the prior-year quarter. The consensus mark for earnings has witnessed upward revisions in the past 30 days.
SBUX earnings missed the Zacks Consensus Estimate in three out of the trailing four quarters and beat on one occasion, with an average miss being 4.6%.
The consensus mark for third-quarter fiscal 2026 revenues is pegged at $9.44 billion, indicating a 0.2% decrease from the year-ago quarter’s reported figure.
Q3 Earnings Whispers for SBUX Stock
Our proven model does not predict an earnings beat for Starbucks this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here.
SBUX’s Earnings ESP: Starbucks has an Earnings ESP of -2.19%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Starbucks Zacks Rank: The company currently carries a Zacks Rank of #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Starbucks Corporation Price and EPS Surprise
Factors Likely to Influence Starbucks’ Q3 Results
Starbucks' third-quarter fiscal 2026 top line is likely to have benefited from sustained growth in customer traffic, reflecting continued execution of its "Back to Starbucks" strategy. Management indicated that positive comparable-sales momentum extended into April, supported by transaction growth across all dayparts, with morning traffic recovering to near-2022 levels.
Investments in Green Apron Service, improved staffing, faster service and enhanced store execution are also expected to have encouraged repeat visits. Meanwhile, continued strength in delivery, which management described as an incremental revenue stream, and the rollout of scheduled mobile-order pickup are likely to have supported higher sales by improving convenience and order efficiency.
Revenues are also likely to have benefited from Starbucks' product innovation, marketing initiatives and stronger customer engagement. The company highlighted robust demand for its new energy Refreshers, mango-flavored beverages and customizable caffeine options, while Cold Foam and premium beverage offerings continued to gain popularity.
Seasonal beverage launches and merchandise for summer, coupled with record Starbucks Rewards membership and rising customer visit frequency, are expected to have further supported comparable sales. In addition, coffeehouse upgrades across key markets and improving sales trends in international markets, including Japan, South Korea and China, are likely to have provided an additional boost to revenue growth.
Despite the positive momentum, Starbucks' top line is likely to have faced headwinds from an uncertain macroeconomic environment, which management said could weigh on consumer spending as higher fuel costs and inflationary pressures persist. Additionally, following the completion of the Starbucks China transaction, the company began recognizing only licensing revenues from China rather than company-operated sales, creating a significant drag on reported consolidated revenues despite healthy underlying demand.
The Zacks Consensus Estimate for Channel Development revenues is pegged at $558 million, compared with $484 million reported in the prior year quarter. On the other hand, the company-operated stores revenues are pegged at $7520 million, down 3.8% year over year.
Starbucks' bottom line is likely to have benefited from improved operating leverage driven by stronger comparable-sales growth and continued progress under its $2 billion cost-savings program. The company also expects coffee and tariff-related cost pressures to moderate during the second half of fiscal 2026, while organizational streamlining should keep general and administrative expenses under control. Furthermore, Starbucks' transition to a China joint-venture licensing structure is expected to have supported profitability through higher-margin licensing income, helping offset ongoing investments in its Green Apron Service initiative.
SBUX Stock’s Price Performance & Valuation
Shares of Starbucks have gained 9.3% in the past year against the industry’s decline of 7.9%. In the same time frame, SBUX has also outperformed the other industry players McDonald's Corporation MCD, Dutch Bros Inc. BROS and Chipotle Mexican Grill, Inc. CMG, respectively.
Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, SBUX trades at a forward price-to-earnings (P/E) multiple of 35.13, above the industry’s average of 22.13. Conversely, industry players, such as McDonald's, Dutch Bros and Chipotle, have P/E multiples of 19.44, 58.5 and 22.13, respectively.
P/E (F12M)
Image Source: Zacks Investment Research
Investment Considerations for SBUX Stock
The company continues to make encouraging progress through its turnaround strategy, with improving customer traffic, stronger product innovation, expanding loyalty engagement and ongoing operational improvements supporting the long-term outlook.
However, near-term uncertainty remains, as the earnings prediction model does not point to a likely earnings beat and reported revenues could be affected by the accounting impact of the China business restructuring despite healthy underlying demand. In addition, the stock continues to trade at a premium valuation relative to much of the restaurant industry, leaving limited room for disappointment if results or guidance fall short of expectations.
Given these factors, existing investors may benefit from staying invested to monitor the company's execution, while prospective investors may find it prudent to wait for the earnings announcement and management's updated outlook before initiating new positions.
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Starbucks Q3 Earnings Ahead: Buy, Sell or Hold the Stock?

The Wendy's Company WEN is advancing its Project Fresh turnaround strategy amid persistent traffic pressure, intense value competition and elevated restaurant costs. U.S. same-restaurant sales declined 7.8% in the first quarter of 2026, primarily because of lower traffic, severe weather and adjustments to restaurant operating hours. Wendy’s nevertheless maintained its full-year outlook and expects sequential quarterly improvement, with global systemwide sales returning to growth in the second half as its turnaround initiatives gain traction.
Project Fresh focuses on strengthening brand relevance, restaurant execution and franchisee economics. Wendy’s introduced its Biggie Deals platform at $4, $6 and $8 price points to provide consistent everyday value while reinforcing product quality. The company also upgraded its core hamburger offerings, completed a significant enhancement to its spicy chicken sandwich and strengthened its innovation process. Customer-segmentation insights and a more audience-based marketing approach are expected to improve advertising effectiveness and strengthen customer engagement as the year progresses.
Early operational indicators support the strategy’s potential. Company-operated restaurants, which have fully implemented the operating playbook, outperformed the broader U.S. system by 310 basis points during the first quarter. Restaurants with the highest customer-satisfaction scores also generated same-restaurant sales that were approximately 400-500 basis points stronger than those of the lowest-performing locations. Wendy’s is expanding training, performance-management programs, order-accuracy technology and restaurant-cleanliness initiatives to extend these operational gains across the franchise system.
The path to EBITDA stabilization, however, remains dependent on a meaningful improvement in restaurant-level performance. First-quarter adjusted EBITDA declined $13.2 million year over year to $111.3 million, reflecting weaker company-operated restaurant margins, lower franchise royalty revenues and higher spending on brand revitalization, field support and international expansion. Wendy’s maintained its full-year adjusted EBITDA outlook of $460-$480 million and expects a U.S. company-operated restaurant margin of 13%, plus or minus 50 basis points. Lower-income consumer pressure, beef inflation and labor-rate increases remain headwinds, while system optimization is expected to create a $15-$20 million adjusted revenue headwind in 2026.
Wendy’s ability to generate EBITDA progress amid weak traffic will likely depend on whether Project Fresh can sustain stronger restaurant execution, improve customer engagement and translate better service levels into a sustained improvement in same-restaurant sales. These factors can support restaurant margins, franchise royalty revenues and operating leverage, making disciplined execution central to the company’s turnaround in a challenging QSR environment.
WEN’s Competitor Landscape
Starbucks Corporation SBUX provides a relevant turnaround benchmark for Wendy’s because it is using service execution, menu innovation and loyalty engagement to rebuild transactions while navigating continued investment pressure. Under its Back to Starbucks strategy, the company is strengthening staffing, scheduling, technology and coffeehouse leadership through Green Apron Service, while its Grow reporting system is reinforcing more consistent store-level execution. Starbucks is also using a redesigned Rewards program, faster menu innovation and coffeehouse upgrades to increase engagement across morning and afternoon occasions. These efforts helped drive U.S. comparable sales growth of 7.1%, led by transaction growth of more than 4%, while consolidated operating margin expanded 110 basis points to 9.4% in the second quarter of fiscal 2026.
McDonald’s Corporation MCD provides a closer operating comparison because it competes directly in the burger QSR category and is using value, marketing and menu innovation to protect traffic in a pressured consumer environment. Its “3 for 3” strategy combines McValue’s under-$3 items and meal deals across dayparts with culturally relevant campaigns and full-margin beef and chicken limited-time offerings. McDonald’s is also expanding its beverage platform through McCafé refreshers and crafted sodas. This approach supported U.S. comparable sales growth of 3.9%, favorable comparable sales and guest-count performance relative to close competitors and continued market-share strength during the first quarter of 2026.
Against this backdrop, Wendy’s faces a more demanding recovery than its larger peers. Starbucks is already translating stronger service execution and loyalty engagement into transaction-led growth, while McDonald’s is using its scale, value architecture and marketing reach to protect traffic and market share. Wendy’s competitive position will depend on whether Biggie Deals and its upgraded core menu can narrow the traffic gap while broader adoption of the Project Fresh operating playbook strengthens franchisee economics.
WEN’s Price Performance, Valuation & Estimates
Shares of Wendy’s have gained 10.1% in the past three months against the industry’s 5% drop.
WEN Three-Month Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, WEN trades at a forward price-to-sales (P/S) multiple of 0.65, below the industry’s average of 3.28.
WEN’s P/S Ratio (Forward 12-Month) vs. Industry
The Zacks Consensus Estimate for WEN’s 2026 earnings per share (EPS) implies a year-over-year decline of 34.1%. The EPS estimates for 2026 have remained unchanged in the past 30 days.
EPS Trend of WEN Stock
Image Source: Zacks Investment Research
WEN’s Zacks Rank
WEN stock currently has a Zacks Rank #4 (Sell).
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Can Project Fresh Stabilize Wendy's EBITDA Amid Weak Traffic?

Domino’s Pizza, Inc. DPZ has pulled back enough to make valuation part of the debate again. The stock no longer looks stretched compared with several benchmarks, and the company still has a powerful franchise model.
The harder question is whether that reset is enough. Estimate pressure, softer ticket trends, margin strain and weaker cash conversion make DPZ look more like a patient investor’s watchlist stock than a clear bargain.
DPZ Valuation Has Reset to Lower Levels
DPZ trades at 16.57X forward 12-month earnings. That compares with 22.63X for the Zacks sub-industry, 23.03X for the Zacks sector and 20.74X for the S&P 500 index.
The discount also shows up against Domino’s own history. Over the past five years, the stock has traded between 14.21X and 40.6X, with a five-year median of 25.16X. That lower multiple gives investors a reason to ask whether much of the disappointment is already reflected in the share price.
Domino’s Results Are Strong but Not Clean
Second-quarter fiscal 2026 revenues rose 4.3% year over year to $1.19 billion and beat the Zacks Consensus Estimate by $15.18 million. Earnings per share of $4.07 increased from $3.81 a year earlier but missed the consensus mark by 10 cents.
Domino's Pizza Inc Price and Consensus
The positives were not minor. Supply-chain revenues increased, global franchise royalties improved and the system added 209 net stores, including 26 in the United States and 183 internationally. Papa John’s International, Inc. PZZA, which currently carries a Zacks Rank #5 (Strong Sell), remains a relevant peer in the same pizza category, where value messaging, delivery demand and franchisee economics are central investor issues.
Still, the quarter had weak spots. U.S. same-store sales increased just 0.1%, and international same-store sales declined 0.1%, excluding currency. Management pointed to strong order counts, but lower average ticket limited the benefit.
DPZ's Margin Pressure Still Clouds the Case
Domino’s is leaning more heavily on value at a time when the broader restaurant market remains promotional. The company revised its second-half marketing calendar and added Stuffed Crust to its Best Deal Ever promotion.
That may support traffic, but it also keeps the ticket and margin debate alive. Pricing rose just 0.2% in the quarter, while weaker product mix weighed on comparable sales.
Cost pressure adds another layer of risk. U.S. company-owned store gross margin declined to 11.4% in the second quarter from 15.6% a year earlier. Food costs, labor costs and insurance all moved against the company.
McDonald’s Corporation MCD, which currently carries a Zacks Rank #4 (Sell), is another useful reference point for investors watching value-led quick-service restaurant demand. Across the group, the challenge is not just driving visits but doing so without sacrificing too much pricing power or restaurant-level profitability.
Domino’s Cash Flow Leaves Some Questions
Cash generation also softened. Net cash provided by operating activities fell 3.9% year over year to $352.6 million in the first two fiscal quarters of 2026.
Free cash flow declined 5.5% to $313.6 million as capital expenditures rose to $39.0 million. The decline reflected changes in operating assets and liabilities, along with the timing and amount of advertising-related payments.
The balance sheet still requires attention. Long-term debt was about $4.88 billion at quarter-end, while first-half interest expense increased to $92.3 million from $90.2 million.
There are offsets. Domino’s repurchased $231.3 million of stock in the first half, had $1.23 billion remaining under its authorization and maintained a quarterly dividend of $1.99 per share. Its leverage ratio also improved to 4.3X from 4.7X a year earlier.
Why DPZ Ratings Favor Patience
The bottom line is that DPZ has become more reasonably valued, but the operating setup is not yet clean enough to call the pullback a straightforward opportunity. The business still has durable advantages, yet ticket weakness, cost inflation and softer estimate trends keep the near-term case uneven.
DPZ stock currently carries a Zacks Rank #4. That rank points to caution over the next one to three months, especially with current-year earnings estimates down over the past 30 days.
The Style Scores tell a more mixed story. DPZ has a Growth Score of A, reflecting the appeal of its long-term business model. Its Value Score of C suggests only moderate cheapness, while a Momentum Score of F signals unfavorable near-term stock behavior. That combination supports a patient stance.
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Domino's Stock Faces a Tough Test Between Value and Near-Term Risk

Starbucks Corporation SBUX is showing tangible signs that its "Back to Starbucks" turnaround is translating into financial improvement. In the second quarter of fiscal 2026, the company returned to year-over-year EPS growth for the first time in more than two years, while consolidated operating margin expanded for the first time since the first quarter of fiscal 2024. Starbucks also raised its full-year outlook, now expecting global and U.S. comparable sales growth of 5% or better, up from its prior outlook of at least 3%. The company also lifted its non-GAAP EPS guidance to $2.25-$2.45 from $2.15-$2.40, pointing to greater confidence in the recovery.
The improved outlook is being supported by stronger customer demand and transaction-led comp growth. U.S. comparable sales increased 7.1%, fueled by transaction growth of more than 4%, while U.S. company-operated morning transactions were roughly back to fiscal 2022 levels. The comp recovery was supported by Green Apron Service, improved staffing, service-time execution, delivery expansion and menu innovation. Starbucks Rewards membership also reached a record 35.6 million active members, strengthening the company’s digital engagement base.
Higher transaction volumes are becoming increasingly important because they can support operating leverage as sales recover. Starbucks expects sales leverage to build over the next two quarters, while its $2 billion cost-savings program remains on track through fiscal 2028. The company also expects coffee and tariff pressures to begin easing in the back half of fiscal 2026. These factors could help offset ongoing Back to Starbucks investments and support better margin flow-through.
International profitability and the China joint venture add another layer to the earnings recovery setup. Starbucks expects the China JV structure to be margin accretive, with the transaction expected to be relatively EPS neutral in fiscal 2026. The company also expects the transition to support a more capital-efficient model in China while allowing it to continue participating in the market’s long-term growth opportunity.
Starbucks’ ability to deliver sustainable earnings growth will likely depend on whether it can convert improving traffic into consistent operating leverage and margin expansion. Customer demand is recovering, guidance has moved higher and several operating initiatives are beginning to support stronger traffic, sales leverage and margin recovery. Together, these factors likely suggest that the Back to Starbucks turnaround is gaining financial traction.
SBUX’s Price Performance, Valuation & Estimates
Shares of Starbucks have gained 16.1% in the past year against the industry’s of 5.3% fall. In the same time frame, other industry players like Dutch Bros Inc. BROS have gained 5.9%, while McDonald's Corporation MCD has declined 7.3%.
SBUX’s One-Year Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, SBUX trades at a forward price-to-sales (P/S) multiple of 3.01, below the industry’s average of 3.30. Conversely, industry players, such as Dutch Bros and McDonald's, have P/S multiples of 4.95 and 6.51, respectively.
SBUX’s P/S Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for SBUX’s fiscal 2026 earnings per share has increased in the past 30 days.
EPS Trend of SBUX Stock
Image Source: Zacks Investment Research
The company is likely to report strong earnings, with projections indicating an 13.2% rise in fiscal 2026. Conversely, industry players like McDonald's are likely to witness an increase of 5.4%, year over year, in 2026 earnings. Meanwhile, Dutch Bros’ 2026 earnings are likely to witness a rise of 22.4% year over year.
SBUX stock currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter?
Let's take a look at what these Wall Street heavyweights have to say about McDonald's (MCD) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.
McDonald's currently has an average brokerage recommendation (ABR) of 2.00, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 35 brokerage firms. An ABR of 2.00 indicates Buy.
Of the 35 recommendations that derive the current ABR, 17 are Strong Buy and one is Buy. Strong Buy and Buy respectively account for 48.6% and 2.9% of all recommendations.
Brokerage Recommendation Trends for MCD
The ABR suggests buying McDonald's, but making an investment decision solely on the basis of this information might not be a good idea. According to several studies, brokerage recommendations have little to no success guiding investors to choose stocks with the most potential for price appreciation.
Are you wondering why? The vested interest of brokerage firms in a stock they cover often results in a strong positive bias of their analysts in rating it. Our research shows that for every "Strong Sell" recommendation, brokerage firms assign five "Strong Buy" recommendations.
This means that the interests of these institutions are not always aligned with those of retail investors, giving little insight into the direction of a stock's future price movement. It would therefore be best to use this information to validate your own analysis or a tool that has proven to be highly effective at predicting stock price movements.
With an impressive externally audited track record, our proprietary stock rating tool, the Zacks Rank, which classifies stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), is a reliable indicator of a stock's near-term price performance. So, validating the Zacks Rank with ABR could go a long way in making a profitable investment decision.
Zacks Rank Should Not Be Confused With ABR
In spite of the fact that Zacks Rank and ABR both appear on a scale from 1 to 5, they are two completely different measures.
The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
It has been and continues to be the case that analysts employed by brokerage firms are overly optimistic with their recommendations. Because of their employers' vested interests, these analysts issue more favorable ratings than their research would support, misguiding investors far more often than helping them.
In contrast, the Zacks Rank is driven by earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research.
Furthermore, the different grades of the Zacks Rank are applied proportionately across all stocks for which brokerage analysts provide earnings estimates for the current year. In other words, at all times, this tool maintains a balance among the five ranks it assigns.
There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices.
Should You Invest in MCD?
Looking at the earnings estimate revisions for McDonald's, the Zacks Consensus Estimate for the current year has declined 0.5% over the past month to $12.86.
Analysts' growing pessimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates lower, could be a legitimate reason for the stock to plunge in the near term.
The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #4 (Sell) for McDonald's. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Therefore, it could be wise to take the Buy-equivalent ABR for McDonald's with a grain of salt.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Is McDonald's (MCD) a Buy as Wall Street Analysts Look Optimistic?

Key Points
A company’s dividend history is no guarantee of that dividend’s future.
That history, however, is still a reasonable indication of what’s likely to materialize in the future, particularly when the underlying business works as well as it ever has.
Less than four months away from becoming a Dividend King, this beaten-down ticker could soon experience rekindled bullish interest.
Need reliable dividend income? Wall Street usually steers investors to the best ones to buy. Now and then, though, it misses one.
That's what seems to be the case here. Down 20% from its February peak and still dancing with new 52-week lows, this blue chip stock's forward-looking dividend yield now stands at a multiyear high of 2.8%. And that's based on a dividend, by the way, that's now been raised every year for the past 49 years, leaving it one year shy of attaining the title of Dividend King, or stocks that have increased their per-share payment for at least 50 straight years.
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There's no end to this streak in sight either. The underlying company is a fast-food restaurant chain, McDonald's (NYSE: MCD).
Built to last
There are more than 45,000 golden arches peppered across the world, with most of them run by franchisees, even though the parent company technically owns the majority of the buildings and land where these stores operate. That's a big reason for the dividend's persistent growth, too -- one of the company's biggest sources of revenue is the market-based rent it charges its franchisees.
So why has the stock fallen as much as it has? Mostly because its core customers have been getting squeezed by inflation, pushing them to purchase more lower-margin value-priced items on the menu. Management is concerned that the economic backdrop could worsen before it gets better, too. Investors haven't wanted to stick around to find out.
Buy the dip
Just don't sweat it too much. This isn't a cycle the company hasn't been through dozens of times before. It always bounces back because it's a well-loved brand selling a consumer product that's always in demand. McDonald's just needs to figure out how to best navigate the headwind.
Indeed, pullbacks like the recent one have been great entry points for this stock, which could be crowned a true Dividend King by the end of October.
Should you buy stock in McDonald's right now?
Before you buy stock in McDonald's, consider this:
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James Brumley has no position in any of the stocks mentioned. The Motley Fool recommends the following options: long January 2028 $320 calls on McDonald's and short January 2028 $340 calls on McDonald's. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Meet the (Almost) Dividend King with a 49-Year Streak That Wall Street Is Sleeping On

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*Stock prices used were the afternoon prices of July 15, 2026. The video was published on July 17, 2026.
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Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool recommends the following options: long January 2028 $320 calls on McDonald's and short January 2028 $340 calls on McDonald's. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

McDonald's Corporation

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