The firm lowered its price target to $129 from $142 on shares of the Oak Brook, IL-based fast food giant.
"Our downgrade is predicated on multiple factors, including slowing U.S. restaurant industry same-store sales trends during Q2 and tougher year-over-year comparisons that McDonald's U.S. begins lapping in the not-too-distant future (particularly in Q4)," Nomura wrote in an analyst note this morning.
The firm lowered its U.S. same-store sales estimate by 60 basis points and now expects an increase of 2.4%.
"With the U.S. restaurant industry looking like it could remain sluggish for the remainder of 2016, and McDonald's starting to lap tougher comparisons in Q4...we believe MCD stock is more likely to be range-bound for the rest of this year," Nomura added.
While the firm applauds changes that management continues to make, such as the testing of fresh beef and actions to reduce costs, Nomura believes that a "neutral rating is more appropriate at this time."
Additionally, U.S. burger sector same-store sales have decelerated meaningfully during the second quarter and U.S. restaurant industry same-store sales trends remain weak, according to the firm.
Separately, TheStreet Ratings Team has a "Buy" rating with a score of B on the stock.
The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income, notable return on equity, expanding profit margins and good cash flow from operations.
The team believes its strengths outweigh the fact that the company has had generally high debt management risk by most measures that were evaluated.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: MCD