McDonald’s (NYSE:MCD) Stock Rating Upgraded by Freedom Capital

McDonald’s (NYSE:MCD) was upgraded by equities research analysts at Freedom Capital from a “hold” rating to a “strong-buy” rating in a research note issued to investors on Wednesday,Zacks.com reports.

A number of other brokerages also recently issued reports on MCD. KeyCorp reduced their price target on McDonald’s from $315.00 to $305.00 and set an “overweight” rating on the stock in a research report on Wednesday. Tigress Financial lifted their price objective on McDonald’s from $385.00 to $390.00 and gave the company a “buy” rating in a report on Friday, July 17th. Barclays cut their target price on McDonald’s from $380.00 to $350.00 and set an “overweight” rating for the company in a research report on Friday, May 8th. Evercore set a $320.00 target price on McDonald’s in a report on Thursday, July 23rd. Finally, Cfra upgraded McDonald’s to a “buy” rating in a research report on Friday, May 8th. One equities research analyst has rated the stock with a Strong Buy rating, sixteen have given a Buy rating and twelve have issued a Hold rating to the company. According to data from MarketBeat.com, the company presently has an average rating of “Moderate Buy” and a consensus target price of $325.44.

McDonald’s Stock Up 0.7%

NYSE MCD opened at $276.05 on Wednesday. The company has a market capitalization of $196.13 billion, a P/E ratio of 22.42, a P/E/G ratio of 2.94 and a beta of 0.41. McDonald’s has a 12-month low of $260.96 and a 12-month high of $341.75. The firm has a 50-day moving average price of $274.14 and a two-hundred day moving average price of $296.58.

McDonald’s (NYSE:MCD) last announced its earnings results on Tuesday, August 4th. The fast-food giant reported $3.38 EPS for the quarter, topping the consensus estimate of $3.32 by $0.06. McDonald’s had a net margin of 31.72% and a negative return on equity of 512.80%. The company had revenue of $7.10 billion for the quarter, compared to analysts’ expectations of $7.13 billion. During the same period last year, the firm earned $3.19 earnings per share. The business’s revenue for the quarter was up 3.7% on a year-over-year basis. Equities analysts expect that McDonald’s will post 12.86 EPS for the current year.

Insider Buying and Selling at McDonald’s

In other McDonald’s news, EVP Desiree Ralls-Morrison sold 2,763 shares of the company’s stock in a transaction on Thursday, May 28th. The stock was sold at an average price of $278.36, for a total transaction of $769,108.68. Following the completion of the sale, the executive vice president directly owned 6,268 shares in the company, valued at $1,744,760.48. This represents a 30.59% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at the SEC website. Also, insider Joseph M. Erlinger sold 5,252 shares of the firm’s stock in a transaction 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 completion of the sale, the insider directly owned 7,734 shares in the company, valued at approximately $2,198,930.88. This represents a 40.44% decrease in their position. The SEC filing for this sale provides additional information. Insiders have sold 8,348 shares of company stock valued at $2,355,634 over the last 90 days. Corporate insiders own 0.26% of the company’s stock.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently bought and sold shares of the business. Vanguard Group Inc. lifted its holdings in shares of McDonald’s by 1.0% in the fourth quarter. Vanguard Group Inc. now owns 72,351,127 shares of the fast-food giant’s stock worth $22,112,675,000 after acquiring an additional 703,458 shares during the last quarter. State Street Corp increased its position in McDonald’s by 2.7% during the 4th quarter. State Street Corp now owns 35,983,997 shares of the fast-food giant’s stock worth $10,997,789,000 after purchasing an additional 959,140 shares in the last quarter. Geode Capital Management LLC lifted its stake in McDonald’s by 0.4% in the 4th quarter. Geode Capital Management LLC now owns 17,038,519 shares of the fast-food giant’s stock valued at $5,195,965,000 after purchasing an additional 76,090 shares during the last quarter. Price T Rowe Associates Inc. MD lifted its stake in McDonald’s by 3.0% in the 4th quarter. Price T Rowe Associates Inc. MD now owns 9,474,749 shares of the fast-food giant’s stock valued at $2,895,768,000 after purchasing an additional 277,617 shares during the last quarter. Finally, Norges Bank acquired a new stake in McDonald’s in the fourth quarter valued at approximately $2,890,438,000. Institutional investors own 70.29% of the company’s stock.

McDonald’s News Summary

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

• Positive Sentiment: Quarterly profit exceeded expectations. McDonald’s reported adjusted earnings of $3.38 per share, above the $3.32 consensus estimate, while revenue rose 3.7% year over year to $7.10 billion. The earnings beat and 31.7% net margin provide support for the stock. McDonald’s posts strong second quarter profit, names new leader for US market
• Positive Sentiment: Analyst support and income appeal remain intact. BTIG reaffirmed its Buy rating with a $350 price target, while the stock’s dividend and consensus Moderate Buy view may attract investors after the recent weakness. BTIG rating reaffirmed
• Positive Sentiment: Management is taking corrective action. McDonald’s appointed a new U.S. leader and is reviewing value offers, digital promotions, restaurant workloads and marketing execution. Stronger international performance could help offset domestic softness. MCD Q2 Earnings Call Flags U.S. Execution Gaps
• Neutral Sentiment: Price targets were reduced but remain above the current level. Morgan Stanley, RBC and Baird lowered their targets to $319, $295 and $285, respectively, citing a more cautious near-term outlook. Their ratings range from Equal Weight to Neutral. Analyst price-target changes
• Negative Sentiment: U.S. growth remains the central concern. Domestic comparable sales rose only 0.8% in the second quarter, and management acknowledged that the current value menu is too complicated and that reduced digital discounts have hurt traffic. Lower-income customers are also spending less at McDonald’s. McDonald’s Looks to Fix a Value Misfire
• Negative Sentiment: Competitive pressure is increasing. Burger King is gaining U.S. sales momentum after revamping its Whopper, while McDonald’s expansion toward 50,000 restaurants is taking longer than planned because of economic conditions. Burger King’s US sales surge while McDonald’s growth flails

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.