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McDonald’s, known for its resilience through economic cycles, faces a challenging outlook for 2025, according to its CEO, Chris Kempczinski. With consumer wallets likely to remain stretched, particularly among lower-income customers, the company is focusing on strengthening its value proposition to maintain its market position. This includes offering more affordable meal deals, emphasizing chicken-based products, which have a more favorable cost structure compared to beef.

Despite these challenges, the seasonal data for McDonald’s Corporation suggests a favorable trading opportunity. Over the last 20 years, the stock has shown a robust annualized return of 52.69% during the period from late October to mid-December. During this time, McDonald's has delivered consistent gains, with 17 out of 20 periods ending positively (85% winning trade percentage), demonstrating the company’s strong resilience in the final quarter of the year. Notably, McDonald’s tends to perform well, reflecting consumer spending trends that often spike during the holiday season.

Why It Could Be a Buy:

1. Strong Seasonal Performance: Historically, McDonald’s shares have gained momentum in Q4, as consumer spending picks up during the holiday season. This period has delivered an average profit of +8.22%, with a maximum rise of +15.08%.

2. Value-Driven Strategies: As Kempczinski noted, McDonald’s focus on offering more affordable meals, particularly chicken-based items, could resonate well with cost-conscious consumers, helping to maintain traffic in its stores.

3. Upcoming Earnings: With McDonald's scheduled to report Q3 earnings on Oct. 29, any positive surprises or upbeat guidance could act as a catalyst for further upside in the stock.

Technical watch

On the monthly chart, there was a break and close above the major Monthly trend line marked below. Technically, this bodes well for higher prices and as long as prices stay above $301 on a weekly closing basis, the bulls remain in control of price. 

Trade risks

McDonald's is preparing for a challenging year in 2025, as inflationary pressures continue to affect consumer spending. This could dampen sales growth in the medium term. Moreover, the company’s ability to deliver value propositions without eroding margins will be critical.

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