McDonald's Stock Has Pulled Back From Its Highs. Is It a Buying Opportunity?

McDonald's (NYSE: MCD) recent sell-off looks more like a buying opportunity than a reason to avoid the stock. As of Sept. 28, shares were at a 52-week low, down about 31% from the high of $341.75 they hit this spring.

The near term could stay bumpy as the business navigates a weak macroeconomic backdrop and searches for ways to reignite sluggish sales growth. But with the stock now trading at a modest price-to-earnings discount and offering a generous dividend yield, investors who buy in today could see solid returns.

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Execution, not the brand, is to blame for slow U.S. comparable sales growth

The stock has been sliding again since the company reported weakening sales growth in its most recent quarter. Global comparable sales grew 1.3% year over year. The U.S. market was the main soft spot, with comparable sales up just 0.8%. This is down from a stronger global comp increase of 3.8% year over year in the first quarter, and a solid U.S. comp increase of 3.9%.

"We simply didn't execute at the level we needed to in the second quarter," CEO Chris Kempczinski said during the earnings call on Aug. 4.

Kempczinski pointed to the withdrawal of several digital offers and the Buy One, Add One program. Those changes hurt traffic and dragged on U.S. comps sales in an already weak consumer spending environment. The tepid results prompted the company to push back its 50,000-restaurant goal to 2028.

All of this has been weighing on the stock, but these look like fixable, near-term issues -- not signs of a broken brand.

McDonald's to invest $5 billion in its ArchIQ AI restaurant system

More than 70 million customers visit McDonald's each day, and nearly 220 million people are signed up for the company's app and loyalty program. That gives it a massive customer base to monetize -- meaning menu and operational improvements can translate quickly into profitable growth at scale.

The company's "NEXT" growth strategy aims to improve food quality and restaurant operations. By the end of 2030, the company plans to invest $5 billion to accelerate deployment for "ArchIQ," its AI-powered restaurant operating system. The goal is to free up crew hours, boost productivity, and help teams spend more time on customer satisfaction and food preparation.

Health trends pose a real risk to the chain's business model, especially the growing use of weight-control treatments like GLP-1s. Management is not running from that headwind, but addressing it head-on. It's an opportunity, as 84% of households that include GLP-1 users visit McDonald's, according to the company's September 2026 Investor Day presentation. So the chain plans to cater to these customers' needs by offering more protein options and portion flexibility.

The stock's decline has brought its price-to-earnings multiple down to 19, well below its 10-year average P/E of around 26. Investors who buy at the current share price are also getting a dividend yield of about 3.2%, supported by earnings and free cash flow.

If management can improve its U.S. traffic trends and execute on its NEXT strategy, which has the potential to fuel higher margins through AI initiatives, today's lower price could look like a strong entry point five years from now.

John Ballard has no position in any of the stocks mentioned. The Motley Fool recommends the following options: long January 2028 $320 calls on McDonald's and short January 2028 $340 calls on McDonald's. The Motley Fool has a disclosure policy.