McDonald’s (NYSE:MCD) Upgraded to “Strong-Buy” at Freedom Capital

Freedom Capital upgraded shares of McDonald’s (NYSE:MCD) from a hold rating to a strong-buy rating in a research report sent to investors on Wednesday morning,Zacks.com reports.

Several other research analysts also recently weighed in on the stock. Piper Sandler set a $286.00 target price on shares of McDonald’s in a research note on Tuesday. Rothschild & Co Redburn raised shares of McDonald’s from a “sell” rating to a “neutral” rating and lifted their price target for the stock from $260.00 to $306.00 in a research note on Thursday, April 23rd. Robert W. Baird cut their price objective on shares of McDonald’s from $305.00 to $285.00 and set a “neutral” rating on the stock in a report on Wednesday. KeyCorp decreased their price objective on shares of McDonald’s from $315.00 to $305.00 and set an “overweight” rating for the company in a research report on Wednesday. Finally, Barclays lowered their target price on McDonald’s from $380.00 to $350.00 and set an “overweight” rating for the company in a research note on Friday, May 8th. One research analyst has rated the stock with a Strong Buy rating, sixteen have assigned a Buy rating and twelve have assigned a Hold rating to the company’s stock. According to MarketBeat.com, the stock presently has an average rating of “Moderate Buy” and an average price target of $325.44.

McDonald’s Stock Performance

McDonald’s stock opened at $276.05 on Wednesday. The firm has a market capitalization of $196.13 billion, a PE ratio of 22.42, a price-to-earnings-growth ratio of 2.94 and a beta of 0.41. McDonald’s has a one year low of $260.96 and a one year high of $341.75. The stock’s 50 day moving average price is $274.14 and its 200 day moving average price is $296.58.

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

McDonald’s Announces Dividend

The business also recently declared a quarterly dividend, which will be paid on Wednesday, September 16th. Stockholders of record on Tuesday, September 1st will be given a dividend of $1.86 per share. The ex-dividend date of this dividend is Tuesday, September 1st. This represents a $7.44 dividend on an annualized basis and a dividend yield of 2.7%. McDonald’s’s dividend payout ratio (DPR) is presently 60.44%.

Insiders Place Their Bets

In other McDonald’s news, 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 transaction of $1,493,248.64. Following the completion of the transaction, the insider directly 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 sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, EVP Desiree Ralls-Morrison sold 2,763 shares of the firm’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 transaction, the executive vice president directly owned 6,268 shares of the company’s stock, valued at approximately $1,744,760.48. This represents a 30.59% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. In the last 90 days, insiders sold 8,348 shares of company stock valued at $2,355,634. Insiders own 0.26% of the company’s stock.

Hedge Funds Weigh In On McDonald’s

Several large investors have recently modified their holdings of MCD. Your Advocates Ltd. LLP bought a new stake in McDonald’s in the fourth quarter valued at about $27,000. IFC & Insurance Marketing Inc. bought a new position in McDonald’s during the 4th quarter worth approximately $29,000. Abound Financial LLC bought a new position in McDonald’s during the 4th quarter worth approximately $30,000. Purpose Unlimited Inc. acquired a new position in shares of McDonald’s in the 4th quarter worth approximately $31,000. Finally, DecisionPoint Financial LLC grew its position in shares of McDonald’s by 1,616.7% in the 4th quarter. DecisionPoint Financial LLC now owns 103 shares of the fast-food giant’s stock worth $31,000 after acquiring an additional 97 shares in the last quarter. Institutional investors own 70.29% of the company’s stock.

Key Stories Impacting McDonald’s

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.