Citi upgrades McDonald’s and Sweetgreen, downgrades Yum! Brands

Investing.com — Citigroup upgraded McDonald’s (NYSE:MCD) Corp and Sweetgreen Inc while downgrading Yum! Brands Inc (NYSE:YUM).

The brokerage sees McDonald’s benefiting from its scale and strategic pricing adjustments, predicting a return to over 3% U.S. comparable sales growth next year. It upgraded the fast-food giant to “buy” from “neutral” with a price target of $334.

“We believe MCD has solved the fundamental challenge of national value, increasingly divergent cost structures across the country, by letting franchisee use the base item price to manage profitability,” analyst wrote, adding “share of voice/leaning back into the megaphone of national advertising in 2025 will win back lost occasions.”

Sweetgreen, known for its focus on health-conscious consumers, also got an upgrade to “buy/high risk” with a price target of $49. Citi pointed to potential financial upside from its Infinite Kitchen initiative and a shift in sentiment around pricing as key drivers.

Whereas Citi downgraded Yum! Brands to “neutral” from “buy,” cutting its price target to $141. The brokerage flagged ongoing international headwinds, including macroeconomic challenges in China, slowing U.S. wage growth, and tech investments that lack clarity on profitability.

Brokerage said lingering global risks and a tougher operating environment could weigh on Yum’s royalty streams, limiting upside potential.