03:06 PM EDT, 07/29/2024 (MT Newswires) -- McDonald's (MCD) can navigate through near-term global headwinds to achieve its long-term growth target in the US even as the fast food chain reported a drop in its Q2 earnings, Wedbush said in a Monday note.

The company's size and scale should help it gain transaction share across its markets, including in the US, Wedbush said, adding that it expects US same-store sales to return towards long-term targets in 2025 as the inflation gap versus grocery begins to normalize by H1 next year.

The investment firm, however, lowered its Q3 US same-store sales growth to negative 1% from positive 2% previously and full-year US same-store sales growth estimate to 0.2% from 1.8%, according to the note.

McDonald's Q2 non-GAAP earnings fell to $2.97 per diluted share from $3.17 a year earlier and were below the $3.07 estimate of analysts polled by Capital IQ. Revenue fell to $6.49 billion from $6.50 billion a year earlier, falling short of the $6.63 billion estimate of analysts polled by Capital IQ.

Meanwhile, in international markets, Wedbush said it was lowering its Q3 same-store sales growth estimate to negative 1% from positive 2% and lowering its full-year same-store sales growth expectations to 0.2% from 2.9%.

Wedbush said that it expects "menu innovation, promotional activity, and [McDonald's] value perception to result in market share gains despite macro headwinds."

Wedbush cut its EPS estimates to $11.66 from $12.20 for 2024 and to $12.44 from $13.14 for 2025.

Wedbush reiterated its outperform rating and price target of $295 on the company's stock.

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