McDonald’s (NYSE:MCD) Reaches New 1-Year Low Following Analyst Downgrade

McDonald’s Corporation (NYSE:MCD) shares reached a new 52-week low during trading on Wednesday after Wells Fargo & Company lowered their price target on the stock from $320.00 to $300.00. Wells Fargo & Company currently has an overweight rating on the stock. McDonald’s traded as low as $264.09 and last traded at $264.8750, with a volume of 3660290 shares traded. The stock had previously closed at $268.94.

MCD has been the topic of a number of other reports. Rothschild & Co Redburn upgraded McDonald’s from a “sell” rating to a “neutral” rating and upped their price objective for the company from $260.00 to $306.00 in a research report on Thursday, April 23rd. Erste Group Bank cut McDonald’s from a “buy” rating to a “hold” rating in a report on Monday, April 27th. BTIG Research reissued a “buy” rating and set a $370.00 target price on shares of McDonald’s in a research report on Thursday, May 7th. Robert W. Baird set a $305.00 target price on McDonald’s in a research report on Thursday, May 7th. Finally, Deutsche Bank Aktiengesellschaft set a $325.00 price target on McDonald’s in a report on Thursday, July 9th. Fifteen investment analysts have rated the stock with a Buy rating and thirteen have assigned a Hold rating to the stock. According to data from MarketBeat.com, the stock presently has a consensus rating of “Moderate Buy” and an average target price of $335.58.

Insider Transactions at McDonald’s

In related news, EVP Desiree Ralls-Morrison sold 2,763 shares of the stock in a transaction dated Thursday, May 28th. The shares were sold at an average price of $278.36, for a total value of $769,108.68. Following the sale, the executive vice president directly owned 6,268 shares of the company’s stock, valued at $1,744,760.48. This represents a 30.59% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available through this hyperlink. Also, insider Joseph M. Erlinger sold 5,252 shares of the business’s stock in a transaction that occurred on Wednesday, June 10th. The shares were sold at an average price of $284.32, for a total value of $1,493,248.64. Following the transaction, the insider owned 7,734 shares of the company’s stock, valued at $2,198,930.88. This trade represents a 40.44% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 8,681 shares of company stock worth $2,456,440 over the last three months. 0.26% of the stock is currently owned by corporate insiders.

McDonald’s News Summary

Here are the key news stories impacting McDonald’s this week:

• Positive Sentiment: McDonald’s is rolling out new limited-time items, including Caesar sauce, new chicken offerings, and other menu tests, which could help boost customer interest and restaurant traffic. McDonald’s builds its new menu around a flavor it never sold
• Positive Sentiment: Analysts continue to view McDonald’s as a strong defensive restaurant name, with commentary pointing to customer engagement, value messaging, and marketing campaigns as potential supports for sales. Can McDonald’s Global Marketing Strategy Drive Customer Traffic?
• Positive Sentiment: One Wall Street note kept a Buy rating on MCD even while trimming its price target, suggesting analysts still see upside from current levels. Citigroup price target change
• Neutral Sentiment: McDonald’s is drawing extra attention from investors and traders, with recent coverage framing the stock as a valuation and defensive-name debate rather than a clear new catalyst. MCD at $268, Starbucks at $106: Buy, Sell or Hold?
• Negative Sentiment: Several articles focus on ongoing “McProblem” issues, including concerns that McDonald’s traffic and business momentum have not improved enough, which may be reinforcing investor worries about the core growth outlook. McDonald’s has a McProblem that’s not getting better
• Negative Sentiment: Another report says McDonald’s stock is near its lowest levels in almost two years, highlighting pressure from weaker sentiment and a more cautious view of the company’s growth. Why McDonald’s stock is at nearly 2-year lows

Hedge Funds Weigh In On McDonald’s

Several hedge funds have recently bought and sold shares of MCD. Norges Bank bought a new position in shares of McDonald’s in the fourth quarter worth about $2,890,438,000. Diamant Asset Management Inc. increased its stake in McDonald’s by 30,979.0% in the 1st quarter. Diamant Asset Management Inc. now owns 2,596,340 shares of the fast-food giant’s stock worth $806,917,000 after buying an additional 2,587,986 shares during the period. J. Stern & Co. LLP lifted its holdings in McDonald’s by 9,867.5% during the 4th quarter. J. Stern & Co. LLP now owns 2,541,008 shares of the fast-food giant’s stock valued at $776,608,000 after buying an additional 2,515,515 shares in the last quarter. Viking Global Investors LP lifted its holdings in McDonald’s by 171.7% during the 2nd quarter. Viking Global Investors LP now owns 3,125,432 shares of the fast-food giant’s stock valued at $913,157,000 after buying an additional 1,974,998 shares in the last quarter. Finally, Arrowstreet Capital Limited Partnership boosted its position in McDonald’s by 49.9% in the 4th quarter. Arrowstreet Capital Limited Partnership now owns 3,104,337 shares of the fast-food giant’s stock valued at $948,779,000 after buying an additional 1,033,041 shares during the period. Institutional investors own 70.29% of the company’s stock.

McDonald’s Trading Up 3.2%

The company has a market capitalization of $194.24 billion, a PE ratio of 22.54, a PEG ratio of 2.75 and a beta of 0.41. The firm’s 50-day simple moving average is $277.23 and its 200-day simple moving average is $300.56.

McDonald’s (NYSE:MCD) last issued its earnings results on Thursday, May 7th. The fast-food giant reported $2.83 EPS for the quarter, topping analysts’ consensus estimates of $2.74 by $0.09. McDonald’s had a net margin of 31.62% and a negative return on equity of 442.10%. The business had revenue of $6.52 billion for the quarter, compared to analyst estimates of $6.47 billion. During the same period last year, the company posted $2.67 earnings per share. The company’s quarterly revenue was up 9.4% compared to the same quarter last year. As a group, analysts anticipate that McDonald’s Corporation will post 12.9 EPS for the current year.

McDonald’s Announces Dividend

The company also recently disclosed a quarterly dividend, which was paid on Tuesday, June 16th. Investors of record on Tuesday, June 2nd were paid a $1.86 dividend. The ex-dividend date of this dividend was Tuesday, June 2nd. This represents a $7.44 annualized dividend and a yield of 2.7%. McDonald’s’s dividend payout ratio is 61.34%.

McDonald’s Company Profile

McDonald’s Corporation (NYSE: MCD) is a global quick-service restaurant company best known for its hamburgers, French fries and breakfast offerings. The company develops, operates and franchises a system of restaurants that sell a range of food and beverage items, including signature products such as the Big Mac, Quarter Pounder, Chicken McNuggets, McCafé coffee beverages and a variety of salads, desserts and seasonal menu items. McDonald’s serves customers through company-operated restaurants and franchised locations, and it supports sales via dine-in, drive-thru, digital ordering platforms and third-party delivery partnerships.

Founded in 1940 by brothers Richard and Maurice McDonald as a single San Bernardino, California restaurant, the business was transformed into a franchising model after Ray Kroc joined in the mid-1950s and led the brand’s national and international expansion.