In a volatile market driven by tariff concerns and economic uncertainties, Wells Fargo suggests that McDonald's stock offers a defensive position for investors. The financial institution has reaffirmed its overweight rating on the fast-food giant, setting a $350 per share price target. This implies a potential upside of over 13% from the recent closing price. Analyst Zachary Fadem highlights McDonald's resilience amid a decline in consumer confidence affecting the broader fast-food sector. Despite industry-wide challenges, McDonald's shares have risen more than 9% this year, contrasting with the S&P 500's nearly 11% drop. Fadem attributes this to McDonald's value options appealing to budget-conscious consumers.
Consumer trends indicate a shift towards more affordable dining options, which benefits McDonald's. While U.S. restaurant credit card spending fell by 1.9% from late 2024 to early 2025, McDonald's experienced a smaller decline of only 0.6%. According to Fadem, such resilience underscores the company's defensive nature. Furthermore, individual catalysts like the Minecraft movie promotion, launched in April, are boosting customer visits. These initiatives become increasingly crucial as sector-wide weaknesses intensify.
Beyond promotional campaigns, McDonald's menu innovations also present opportunities. New items such as McCripsy Chicken Strips, Snack Wraps, and an enhanced lemonade offering could drive further growth. However, analysts at Wells Fargo project slightly lower earnings compared to consensus estimates. They forecast first-quarter earnings per share of $2.65 on revenue of $6.06 billion, against FactSet's projections of $2.66 and $6.1 billion respectively. McDonald's is scheduled to release its quarterly results on May 1.
Amid ongoing trade tensions and economic uncertainty, McDonald's strategic moves appear well-positioned. The combination of value offerings, innovative menu items, and targeted promotions may continue to attract both customers and investors. As the International Monetary Fund adjusts its U.S. growth outlook due to trade disputes, McDonald's defensive posture could prove advantageous in navigating turbulent markets.