MW McDonald's $3 menu is about to kick off. Here's why Wall Street is already a fan.
By Bill Peters
UBS analysts say the new, more affordable menu options further support McDonald's value strength
Shares of McDonald's have pulled back from a high in February.
When McDonald's launched its "McValue" menu last year, analysts said it reflected weaker demand for fast food. Now, as the burger chain prepares to rework that menu starting Tuesday with even cheaper options, including some for under $3, some see the move as a strength.
UBS analysts, in a research note Monday, said the new menu, which also includes $4 breakfasts, should "further support McDonald's value strength," as shoppers, particularly lower-income ones, remain frugal in the face of higher prices at restaurants and virtually everywhere else. One major advantage, the analysts suggested, was McDonald's $(MCD)$ size.
"We believe larger-scale competitors with strong absolute value perceptions are best positioned to profitably and effectively execute against value offerings and platforms, including [McDonald's] and Taco Bell," the analysts wrote.
Yum Brands (YUM) is the parent of Taco Bell.
Recent data from a UBS survey of around 1,600 consumers found that more people than last year saw McDonald's and Restaurant Brands International's $(QSR)$ Burger King as having the best prices for value meals or combos. Fewer consumers cut back on visits to McDonald's because it was too expensive, the survey found.
The remarks from those analysts and others come as McDonald's stock pulls back from highs reached in February, and as shares remain down fractionally over the past 12 months. Management at the chain in February signaled this year could be difficult, as restaurants try to find ways to offer more discounts to attract consumers.
However, executives also said that McDonald's less-expensive menu options were winning back some lower-income customers. As those offerings start to click, Oppenheimer analysts, in a note this month, said the pullback represented a chance to buy the stock.
Shares of McDonald's fell 1.4% on Monday, but have gained 0.4% so far this year. In comparison, Yum Brands' stock has gained 7% in 2026 while Restaurant Brands shares have rallied 15.7%.
GimmeCredit analyst Carol Levenson, in a note last month, said that even if some parts of the internet mocked McDonald's CEO after he took what may or may not have been too small of a bite out of a Big Arch burger, the McValue menu has gone over better publicly.
"McDonald's was losing touch with its affordable roots," she said. She noted that last year, a Big Mac in Chicago cost $10. As of March, that same meal cost closer to $13, she said.
Along with a $3 menu, McDonald's also plans to start selling energy drinks and novelty sodas later this year, according to the Wall Street Journal. KeyBanc analysts, in a note on Sunday, said the new beverages would likely be a main focus for investors.
The Oppenheimer analysts said there was likely more room for McDonald's to expand its beverage business through this year and next year. However, at RBC, the excitement surrounding any new energy drink was more muted.
"We anticipate a modest check uplift but limited traffic benefit for MCD," RBC analyst Logan Reich said in a note last week.
-Bill Peters
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
April 20, 2026 17:06 ET (21:06 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
Comments