McDonald's Corp (MCD.N) 3Q26 First Bite: Better Than Feared US Comp; EPS Beat on G&A and Other OpEx

MCD's aggregate comp and bottom-line results bested Citi/Street estimates, however the components were not necessarily worth getting too excited about with (1) US SSS better than feared (down 0.2% vs. Citi/Street down 0.5%) but IOM missed the mark (+1.4% vs. Street's +2.0%), and (2) the EPS beat was primarily driven by other opex ($0.14/$0.15 better vs. Citi/Street, on refranchising gains) and lower G&A (about $0.05 better than Citi/Street). With the YTD stock performance/valuation pull-back, we see shares reacting positively to results in the NT with swing factors tied to company commentary regarding a US national value re-start (<$4 menu), negotiations with franchisees on remodeling (contribution, timing, etc.) and/or any material swing in 4QTD SSS across US/IOM. Only change to 2026 guidance was a lowering of capex expectations to the low end of the prior range. While not the highest quality beat, we expect shares move higher NT. Our $295 target price is based on 14.5x our NTM EBITDA