Wall Street is losing faith in McDonald’s stock. Jim Cramer says it’s a buying opportunity for investors. The restaurant chain on Tuesday was hit with yet another downgrade, its third in less than a week . Most recently, Redburn Atlantic slashed its rating on McDonald’s to a sell from buy — known as a double downgrade in Wall Street parlance — and lowered its price target to $260 a share from $319, implying a downside of nearly 15% from Monday’s close. The analysts argued GLP-1 weight loss drugs are dampening customer appetites and “represent an underappreciated longer-term threat” to sales for fast-food chains like McDonald’s. “Weight-loss drugs are reshaping restaurant demand – not only by suppressing appetite, but also through behavioural spillovers,” the firm wrote. “They are going to be wrong,” Cramer said of the analyst’s research. “I think McDonald’s is going to shrug off every one of these downgrades, and you have to buy the stock.” Cramer has generally viewed McDonald’s as a difficult stock to downgrade because he believes knowing when its fortunes are going to turn around is difficult. Shares of McDonald’s slipped 1.3% Tuesday morning as investors digested Redburn’s bearish call, bringing the stock’s losses in the month of June to around 4%. The S & P 500 has added nearly 2% in the same stretch, including modest gains in Tuesday’s session. The other two downgrades in recent days weren’t quite as negative as Redburn. On Monday, Morgan Stanley cut McDonald’s to a hold-equivalent rating from a buy , and lowered its price target to $324 from $329 a share. A session prior, Loop Capital also cut its rating on the stock to hold from buy. In Loop Capital’s call, the analysts argued that same-store sales growth may not rebound in 2025 as much as hoped following two quarters of softening traffic among lower- and middle-income consumers, two significant customer bases for McDonald’s. Loop’s concerns partially stem from the “predominantly negative customer feedback” from its recent chicken strip launch, which “does not bode well ahead of [its] pending snack wrap introduction that will include the new chicken strip” The analysts also lowered their price target on McDonald’s to $315 a share from $346 in last week’s note to clients. But Cramer said CEO Chris Kempczinski will course correct if the rollout of these offerings don’t prove to be successful. “I know that Chris will kill that if it doesn’t sell,” Cramer said. “People are really underrating Chris. He is a great CEO.” Cramer continued, “[He] is just not going to sit there and say ‘Oh man, these strips are bad, but let’s just keep jamming them down the throat of the franchisees.'”
