McDonald’s Is Rallying, but Can You Sleep at Night Owning It?
McDonald's stock has jumped 20% in a month, yet one podcast host says weight-loss drugs make it impossible to own. Another host points to a hidden real estate empire. Which argument holds up when traffic and franchisee discipline get tested?
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Shares of McDonald’s (NYSE:MCD | MCD Price Prediction) have climbed 10.0% over the past week and 20.3% over the past month to $280.22. A third-quarter report showing U.S. traffic improving after a push on value caused much of the move. One value-investing podcast host still wants no part of the stock.
Shawn O’Malley, co-host of The Investor’s Podcast Network show The Investor’s Podcast, made a bear case built around GLP-1 drugs in the show’s McDonald’s episode: “I just don’t see how I could sleep at night owning shares in McDonald’s.”
Why One Host Sees GLP-1 Drugs as a Lasting Threat
GLP-1 drugs are weight-loss medications that mimic a gut hormone to control appetite. O’Malley argued that earlier anti-fast-food movements never hurt demand at scale. GLP-1 drugs directly change cravings for junk food, and in his view that makes this threat different and durable. He said he lacks confidence that “on an inflation-adjusted basis, McDonald’s addressable market and their business will be bigger in the U.S. and most of their developed markets in a decade or so from now.”
He also pointed to the competition. O’Malley said Chick-fil-A did about $24 billion in U.S. sales last year from only about 3,300 restaurants, up from $12 billion in 2019. He added that the average Chick-fil-A restaurant does $7.7 million in annual sales, nearly twice what a McDonald’s does. On pricing, O’Malley said McDonald’s menu prices have gone up 40% since 2019, and the chain is now trying to win customers back with $5 meal deals.
Cramer Expects Analysts to Turn Bullish
Jim Cramer took the other side on CNBC on November 4. He credited management’s clearer plan on value and said encouraging traffic trends first seen in September carried into October. “I think a lot of analysts are going to change their mind based on October, and I think you’re going to get higher prices for the stock,” he said.
The shares fell from an all-time high of $341.75 in March to $229.20 in early October. The stock has since risen more than 20% from that low in less than a month. U.S. comparable sales declined 0.2%, the first domestic decline since the first quarter of 2025. That still beat expectations for a 0.5% decline.
Franchisees Who Followed the Value Plan Came Out Ahead
On CNBC’s Fast Money, Tim Seymour said franchisees who stuck to the company’s pricing plan outperformed those who did not. He said a third of franchisees passed on the 10 items priced under $3, adding, “Now they’re burned by it, so they’re going to adhere going forward.”
Chief executive Chris Kempczinski struck a similar note in the third-quarter earnings release: “In the U.S., we’re encouraged by improvement as the quarter progressed following our intervention on value.” Adjusted EPS of $3.57 beat consensus by 5.52%. Revenue of $7.16 billion missed the $7.29 billion estimate. Global comps rose 1.5%, and the quarterly dividend went up 4% to $1.93. Management is also testing entry-level bundles in about 1,900 restaurants, with the goal of a national program in early 2027.
A Real Estate Empire Hiding Inside a Burger Chain
Daniel Mahncke co-hosted the same The Investor’s Podcast episode and sees the stock differently than O’Malley does. Mahncke said McDonald’s real estate is carried on the balance sheet at only about $28 billion, while some estimates value it at about $120 billion.
Mahncke said McDonald’s runs an operating margin of 46%, while at Chipotle Mexican Grill (NYSE:CMG) it is about 15%. He added that rent and royalties of about $16.5 billion come at an 84% margin. The company raised its dividend for the 50th consecutive year, to $7.72 annually, and it bought back $2.1 billion of stock. At a P/E of about 23, the shares give both hosts plenty to argue over.
What to Watch Before Taking Sides
Three questions will decide which host’s view holds up.
- First, watch whether the October traffic gains last through the fourth quarter. Management said directly that it did not expect fourth-quarter U.S. comparable sales to exceed third-quarter results.
- Second, watch whether franchisees stick with value pricing as the bundle test plays out.
- Third, look for any evidence that GLP-1 drugs are reducing how often customers visit.
Investors can follow quarterly results on the company’s investor relations site and compare them with the second-quarter results filed with the SEC.
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Trey has been an editor and author at 24/7 Wall St. for more than a decade, where he has published thousands of articles analyzing corporate earnings, dividend stocks, short interest, insider buying, private equity, and market trends. His comprehensive coverage spans the full spectrum of financial markets, from blue-chip stalwarts to emerging growth companies.
Beyond 24/7 Wall St., Trey has created and edited financial content for Benzinga and AOL's BloggingStocks, contributing additional hundreds of articles to the investment community.
Trey's editorial expertise extends across multiple publishing environments. He served as production editor at Dearborn Financial Publishing and development editor at Kaplan, where he helped shape financial education materials. Earlier in his career, he worked as a writer-producer at SVE. His freelance editing portfolio includes work for prestigious clients such as Sage Publications, Rand McNally, the Institute for Supply Management, the American Library Association, Eggplant Literary Productions, and Spiegel.
Outside of financial journalism, Trey writes fiction and has been an active member of the writing community for years, moderating workshop sessions at regional conventions.
