Will the partnership drive incremental traffic or cannibalize existing restaurant traffic?

Fundamental view – incremental traffic outweighs cannibalisation

The McDonald’s‑DoorDash tie‑up removes a key friction point for off‑premise sales: the need for a separate app or account. By opening McDelivery to any web‑browser user, the partnership expands the addressable “digital‑first” consumer base, especially among casual, on‑the‑go diners who prefer a quick click‑to‑door experience. Historically, McDonald’s’ off‑premise share has hovered around 15‑20 % of total sales; the new channel is likely to lift that to the high‑20s as DoorDash’s 30 + million U.S. active users are cross‑sold Mc‑menu items. Because the service is fulfilled by DoorDash’s existing dasher network, marginal delivery costs are low, preserving margin and making each added order net‑positive. Cannibalisation of in‑store traffic is limited – most web‑orderers are “digital‑only” customers who would otherwise dine out, order from a competitor, or skip the meal entirely. The net effect should be a modest but sustainable boost to same‑store sales, especially in urban and suburban markets where delivery penetration is already high.

Technical & market dynamics – the stock has been trading in a tight 5‑month range (USD 260‑280) with the 200‑day SMA near USD 270. The recent partnership news sparked a short‑lived rally to the upper band, but volume‑adjusted momentum (RSI ≈ 58) remains neutral, suggesting the market has not fully priced in the upside. A breakout above USD 280 on strong volume could signal the market’s recognition of incremental‑traffic upside; a retest of the 200‑day SMA with a bounce off the 50‑day SMA would be a safer entry point for a medium‑term long position. Conversely, a pull‑back below USD 260 could indicate concerns about delivery‑cost inflation or a shift back to in‑store traffic, offering a buying opportunity at a discount.

Actionable insight – Given the high‑confidence sentiment (70) and the clear incremental‑traffic narrative, we rate McDonald’s Neutral‑to‑Bull with a $285 target (≈ 5 % upside) over the next 3‑6 months. For investors already long, consider adding on a dip near USD 265‑270 with a stop just below the 200‑day SMA. If the price breaches USD 280 on volume, a short‑term swing‑trade upside could be justified; otherwise, maintain a core long exposure to capture the expected lift in comparable‑store sales from the expanded delivery channel.