Valued at a market cap of $223.7 billion, McDonald's Corporation (MCD) is a leading fast-food chain that owns, operates, and franchises restaurants under the McDonald's brand. The Chicago, Illinois-based company’s menu features a diverse range of items, including burgers, sandwiches, fries, salads, breakfast options, desserts, soft drinks, coffee, and other beverages. 

Companies valued at $200 billion or more are typically classified as “mega-cap stocks,” and MCD fits the label perfectly, with its market cap exceeding this threshold, underscoring its size, influence, and dominance within the restaurants industry. With a presence in over 100 countries, the company benefits from a global scale, allowing for strong brand loyalty and consistent customer traffic. Its key strengths lie in its globally recognized brand, extensive franchise network, and highly efficient supply chain. These strengths, combined with its marketing power and real estate strategy, give McDonald’s a durable competitive edge.

This fast-food giant is currently trading 4.4% below its 52-week high of $326.32, reached on Mar. 10. McDonald's has gained 1.1% over the past three months, outperforming the broader S&P 500 Index’s ($SPX) marginal decline during the same time frame.

In the longer term, MCD has rallied 23% over the past 52 weeks, outpacing SPX’s 11.4% uptick over the same time frame. Moreover, on a YTD basis, shares of MCD are up 7.6%, compared to SPX’s slight rise.

To confirm its bullish trend, MCD has been trading above its 200-day moving average since mid-August, 2024, and has remained above its 50-day moving average since early February, with some fluctuations.

On May 1, shares of MCD plunged 1.9% after its mixed Q1 earnings release. The company’s revenue declined 3.5% year-over-year to $6 billion and fell short of the consensus estimates by 2%. The top line miss was largely due to reduced store traffic amid ongoing economic uncertainty, particularly in the U.S., where comparable sales fell by 3.6%. Moreover, all the segments were impacted by the comparison to Leap Day in the previous year. On the earnings front, its operating income decreased 3.2% compared to the prior-year quarter, reaching $2.6 billion. However, while its adjusted EPS of $2.67 also fell 1.1% from the year-ago quarter, it came in above Wall Street expectations of $2.64. 

MCD’s outperformance looks more pronounced when compared to its rival, The Wendy's Company (WEN), which declined 35.6% over the past 52 weeks and 31.8% on a YTD basis. 

Looking at MCD’s recent outperformance, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of "Moderate Buy” from the 34 analysts covering it, and the mean price target of $337.34 suggests an 8.2% premium to its current price levels.