McDonald's Invests Judiciously for the Long Run as Fast Food Pressures Don't Show Signs of Easing

We surmise McDonald’s is poised for market share gains, despite a sour fast-food backdrop. Although we see few catalysts this year amid our expectation for lackluster industry traffic, the firm is prudently working with franchisees to bolster its value proposition to meet consumers in their quest for value. Meanwhile an enhanced focus on centralization positions it to capture global whitespace through unit growth—all while staying focused on evolving tastes and ramping up digital engagement. We posit this approach has manifested in 5.4% comparable sales growth against just 2.2% total growth for the global foodservice industry over the last seven years. And we expect outperformance to endure, with 5.6% system sales growth driven by 3.1% comp boosts and 3.7% unit growth over the next five years, outstripping our 4.5% expectation for the restaurant industry.