McDonald's (MCD): Goal of Structural Technology Driven Cost Efficiencies to Allow Other Customer Facing Re-Investments = Net Overall Store Profit Gains

We remain Overweight on McDonald's. McDonald's Analyst Day delivered the 4-year (2027-2030) reinvestment roadmap we had flagged coming out of our August 5 dinner with CEO Chris Kempczinski and CFO Ian Borden, with few surprises relative to the "structurally better chicken & beverage destination" thesis. "McDonald's Next" added ~250 bps of gross restaurant-level efficiency, +1.5 share points each in chicken and beverages by 2030, low-to-mid 50% operating margins vs the 47.5% posted in F25, and ~$8.5b of franchisee partnering through 2036 (with ~60% by 2030). We lower our Dec-27 price target to $260, based on a new and higher 5.75% F31 FCF yield relative to the 10-yr at 5.11%, implying ~18.5x F28E EPS and ~13x F28E EBITDA (vs QSR ~12.8x, DPZ ~12x, YUM ~14x on F28 EBITDA). MCD guided to net unit growth of nearly 4.5% in 2027 and 3.0-3.5% annually from 2028-2030, reaching ~50k global units by 2028. Chicken is where execution risk is highest given whether hand-breading can clear the labor,