Investing.com – Citigroup raised its ratings on McDonald’s (NYSE:) Corp and Sweetgreen Inc, while downgrading its ratings Yum! Brands Inc. (New York Stock Exchange:).
The brokerage sees McDonald’s benefiting from its scale and strategic price adjustments, forecasting a return to more than 3% U.S. comparable sales growth next year. He upgraded the fast food giant to “buy” from “neutral” with a $334 price target.
“We believe MCD has solved a fundamental national value problem, increasingly divergent cost structures across the country, by allowing franchisees to use base product pricing to drive profitability,” the analyst wrote, adding that “share of voice/leaning back into the megaphone of national advertising in 2025 will bring back lost opportunities.”
Sweetgreen, known for its focus on health-conscious consumers, was also upgraded to Buy/Strong Risk with a $49 price target. Citi pointed to the potential financial gains from its Infinity Kitchen initiative and changing sentiment around pricing as key factors.
While Citi downgraded Yum! Brands is neutralized to Buy, lowering its price target to $141. The brokerage noted ongoing international headwinds, including macroeconomic challenges in China, slowing U.S. wage growth and technology investments that lack clarity on profitability.
The brokerage said ongoing global risks and a tougher operating environment could put pressure on Yum’s royalty flows, limiting growth potential.