McDonald’s shares slump as GLP-1 risks spur rare sell rating

McDonald’s Corp. shares slumped on Tuesday after Redburn Atlantic slapped the burger chain with its sole sell rating, saying shifting consumer patterns due to weight-loss drugs and inflation are cause for concern.

Shares of McDonald’s fell as much as 1.6% in premarket trading on the downgrade, a two-notch cut from Redburn’s previous buy rating. The stock has declined for six straight days, it’s longest losing streak in a year, after closing just below a record high in mid-May.

As more Americans turn to GLP-1 drugs like Ozempic to lose weight, McDonald’s could see as much as a $428 million annual impact to revenue, representing about 1% of system sales, Redburn Atlantic analyst Chris Luyckx wrote. “A 1% drag today could easily build to 10% or more over time, particularly for brands skewed toward lower-income consumers or group occasions.”

Luyckx also cut McDonald’s price target to a Street-low $260, implying a nearly 15% decline from where the stock closed on Monday. Other analysts remain largely split on the stock, with 22 buy-equivalent ratings, 18 hold-equivalent ratings and an average price target of $332, according to data compiled by Bloomberg.