McDonald's same-store sales were down 1.9 percent globally in January and one analyst expects these declines to continue as competition heats up and some U.S. consumers feel the pinch of the payroll tax hike.
"We have the lowest estimates on the Street for Fiscal 2013," Jefferies analyst Andy Barish told CNBC's "Squawk on the Street" on Friday. "We think the next couple of months are going to be negative comp numbers not only globally but in the U.S. as well given the tough comparisons they have coming up."
And as same-store sales remain tepid, margins are likely to come under pressure, particularly as McDonald's uses dollar menu offerings to keep customers coming in.
He said that although McDonald's has the marketing might and brand to "buy some sales," ongoing emphasis on cheaper dollar menu items will eat into margins.
McDonald's also faces stiffer competition from Burger King and Wendy's. "It feels like the other national competitors as well as regional players in quick service have stolen pages from McDonald's playbook over the last 10 years that have helped drive such impressive U.S. results," Barish said. "They just have new stuff, while McDonald's is running out of arrows in their quiver."
Early data is also suggesting consumers may be more reluctant to eat out as the payroll tax increase bites into income.
"It's a choppy, challenging environment out there even for quick service," he said. But Barish expects the fast-food chains to hold up better than casual dining chains.
Barish has an $85 price target on McDonald's, implying about 12 percent downside from current levels.
"We believe these tepid same-store sales are going to lead to margin pressure," he said. "We think Street numbers will come down and the multiple will compress to a mid-teens multiple."
—By CNBC's Justin Menza
Barish and Jefferies had no conflicts to report.