Morgan Stanley Has Lowered Expectations for McDonald’s (NYSE:MCD) Stock Price

McDonald’s (NYSE:MCD) had its price objective reduced by Morgan Stanley from $322.00 to $319.00 in a research note issued on Wednesday. The brokerage currently has an “equal weight” rating on the fast-food giant’s stock. Morgan Stanley’s target price would suggest a potential upside of 18.88% from the company’s current price.

A number of other equities research analysts also recently weighed in on the company. KeyCorp cut their target price on McDonald’s from $315.00 to $305.00 and set an “overweight” rating for the company in a research report on Wednesday. Sanford C. Bernstein reiterated a “market perform” rating on shares of McDonald’s in a research report on Monday, June 22nd. JPMorgan Chase & Co. cut their price objective on McDonald’s from $325.00 to $305.00 and set an “overweight” rating for the company in a report on Monday, May 11th. Cfra raised McDonald’s to a “buy” rating in a research note on Friday, May 8th. Finally, Wells Fargo & Company lowered their target price on McDonald’s from $320.00 to $300.00 and set an “overweight” rating on the stock in a report on Thursday, July 16th. Sixteen equities research analysts have rated the stock with a Buy rating and twelve have given a Hold rating to the company’s stock. According to data from MarketBeat.com, McDonald’s has a consensus rating of “Moderate Buy” and an average target price of $329.44.

McDonald’s Trading Up 1.2%

McDonald’s stock opened at $268.35 on Wednesday. The stock has a market cap of $190.66 billion, a price-to-earnings ratio of 22.12, a PEG ratio of 2.85 and a beta of 0.41. The company’s 50-day moving average price is $274.32 and its two-hundred day moving average price is $297.05. McDonald’s has a 52 week low of $260.96 and a 52 week high of $341.75.

McDonald’s (NYSE:MCD) last issued its quarterly earnings results on Tuesday, August 4th. The fast-food giant reported $3.38 earnings per share for the quarter, topping analysts’ consensus estimates of $3.32 by $0.06. The company had revenue of $7.10 billion during the quarter, compared to analyst estimates of $7.13 billion. McDonald’s had a net margin of 31.62% and a negative return on equity of 442.10%. The business’s revenue for the quarter was up 3.7% compared to the same quarter last year. During the same period in the prior year, the business posted $3.19 EPS. Research analysts expect that McDonald’s will post 12.85 earnings per share for the current fiscal year.

Insiders Place Their Bets

In other news, 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 transaction of $1,493,248.64. Following the sale, the insider owned 7,734 shares in the company, valued at $2,198,930.88. The trade was a 40.44% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, EVP Desiree Ralls-Morrison sold 2,763 shares of the company’s stock in a transaction that occurred on Thursday, May 28th. The shares were 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 owned 6,268 shares of the company’s stock, valued at approximately $1,744,760.48. This trade represents a 30.59% decrease in their position. The SEC filing for this sale provides additional information. Insiders sold a total of 8,348 shares of company stock valued at $2,355,634 in the last quarter. 0.26% of the stock is currently owned by corporate insiders.

Institutional Trading of McDonald’s

Hedge funds have recently modified their holdings of the business. Vanguard Group Inc. lifted its stake in McDonald’s by 1.0% in the 4th 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 in the last quarter. State Street Corp increased its holdings in shares of McDonald’s by 2.7% in the 4th quarter. State Street Corp now owns 35,983,997 shares of the fast-food giant’s stock valued at $10,997,789,000 after purchasing an additional 959,140 shares during the period. Geode Capital Management LLC increased its holdings in shares of 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 period. Price T Rowe Associates Inc. MD lifted its position in shares of McDonald’s by 3.0% in the fourth quarter. Price T Rowe Associates Inc. MD now owns 9,474,749 shares of the fast-food giant’s stock worth $2,895,768,000 after purchasing an additional 277,617 shares in the last quarter. Finally, Norges Bank purchased a new stake in shares of McDonald’s in the fourth quarter worth approximately $2,890,438,000. Hedge funds and other institutional investors own 70.29% of the company’s stock.

McDonald’s News Roundup

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

• Positive Sentiment: McDonald’s reported adjusted earnings of $3.38 per share, ahead of the $3.32 analyst consensus and up from $3.19 a year earlier. Revenue rose 3.7% to $7.10 billion, while stronger franchised margins and record restaurant margins supported profits despite revenue coming in slightly below expectations. McDonald’s Q2 Earnings Surpass Estimates
• Positive Sentiment: Comparable sales increased across all three operating segments, with international markets providing important support as the U.S. business slowed. Management said the company sees an opportunity to improve value, service and food quality in the domestic market. McDonald’s posts strong second quarter profit
• Neutral Sentiment: McDonald’s appointed longtime executive Skye Anderson as president of McDonald’s USA, replacing Joe Erlinger. Anderson will oversee nearly 14,000 U.S. restaurants and is tasked with restoring traffic and improving execution; the change offers a potential turnaround catalyst but also highlights the urgency of the domestic slowdown. McDonald’s names Skye Anderson as U.S. president
• Negative Sentiment: U.S. comparable sales rose only 0.8%, down from 2.5% a year earlier and below expectations. Traffic weakened as lower-income consumers remained under pressure from elevated prices and gas costs. McDonald’s US sales disappoint
• Negative Sentiment: The company acknowledged that its value strategy became overly complicated: too many simultaneous promotions and reduced digital deal activity confused customers and employees, failing to bring back enough loyal diners. McDonald’s also delayed its goal of reaching 50,000 global restaurants from 2027 to 2028, signaling a more cautious growth outlook. McDonald’s admits its value meals have become too confusing

About McDonald’s

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.