McDonald's (MCD) estimates were lowered through 2030 given the investment under its NEXT strategy, though top line reflects an improvement but probably not as much as the company's targets, Morgan Stanley said in a note Monday.

The investment firm said it expects US comparable same-store-sales growth in Q3 and Q4 to decrease by 0.5% and 1%, respectively, versus consensus for a 0.2% decline and flat growth respectively, considering management's "slightly negative" expectations for Q3, as well as projected pressure and tough comparisons through the end of the year.

Of the estimated $5 billion of franchise capital support expected through 2030, Morgan Stanley said it expects about $3.25 billion will be in the form of rent relief, with the remaining $1.75 billion in capital expenditure.

This is projected to drive a 0.2% decline in 2026 revenue to about $28 billion, slightly below the Street estimate of $28.1 billion, according to the note. The impact is expected to be larger in 2027 and 2028, with revenue projected to fall 4% and 11.4% to $28 billion and $27.1 billion, respectively, the firm said.

Adjusted earnings per share in 2026 remains largely unchanged at $12.84, below Street consensus of $12.88, but the impact will be heavier in 2027 and 2028, with Morgan Stanley's estimates declining to $13.67 and $14.15, respectively, versus $13.74 and $14.65 previously.

Morgan Stanley lowered its price target to $297 from $308, with an equal-weight rating.

Price: 234.76, Change: -1.75, Percent Change: -0.74