Argus Has Lowered Expectations for McDonald's (NYSE:MCD) Stock Price

Key Points

• Argus lowered McDonald’s price target from $320 to $310 but maintained a “buy” rating, implying roughly 15.7% upside from the stock’s $267.85 price. The broader analyst consensus remains “Moderate Buy,” with an average target of $322.96.
• McDonald’s exceeded quarterly earnings expectations, reporting $3.38 in EPS versus a $3.32 estimate, while revenue rose 3.7% year over year to $7.10 billion, slightly below forecasts.
• The stock has declined from its 52-week high of $341.75 and trades below both its 50-day and 200-day moving averages. Two executives recently sold shares, while institutional investors own approximately 70.3% of the company.

McDonald's (NYSE:MCD - Get Free Report) had its price target decreased by stock analysts at Argus from $320.00 to $310.00 in a research note issued to investors on Wednesday,Benzinga reports. The firm presently has a "buy" rating on the fast-food giant's stock. Argus' price target would indicate a potential upside of 15.74% from the company's current price.

Several other research analysts have also commented on the company. Wells Fargo & Company lowered their price target on McDonald's from $320.00 to $300.00 and set an "overweight" rating for the company in a research report on Thursday, July 16th. Tigress Financial raised their price objective on shares of McDonald's from $385.00 to $390.00 and gave the company a "buy" rating in a report on Friday, July 17th. JPMorgan Chase & Co. decreased their target price on McDonald's from $325.00 to $305.00 and set an "overweight" rating for the company in a research note on Monday, May 11th. Freedom Capital raised McDonald's from a "hold" rating to a "strong-buy" rating in a report on Wednesday, August 5th. Finally, Sanford C. Bernstein reissued a "market perform" rating and set a $295.00 price target on shares of McDonald's in a report on Wednesday, August 5th. One research analyst has rated the stock with a Strong Buy rating, fifteen have assigned a Buy rating and eleven have issued a Hold rating to the company. According to data from MarketBeat, the stock has an average rating of "Moderate Buy" and an average target price of $322.96.

McDonald's Stock Performance

NYSE MCD opened at $267.85 on Wednesday. The stock's fifty day moving average is $271.68 and its two-hundred day moving average is $292.78. The firm has a market capitalization of $189.54 billion, a P/E ratio of 21.81, a price-to-earnings-growth ratio of 3.05 and a beta of 0.41. McDonald's has a fifty-two week low of $260.96 and a fifty-two week high of $341.75.

McDonald's (NYSE:MCD - Get Free Report) last posted its quarterly earnings results on Tuesday, August 4th. The fast-food giant reported $3.38 earnings per share for the quarter, beating the consensus estimate of $3.32 by $0.06. The business had revenue of $7.10 billion during the quarter, compared to analysts' expectations of $7.13 billion. McDonald's had a net margin of 31.72% and a negative return on equity of 572.06%. The business's revenue for the quarter was up 3.7% on a year-over-year basis. During the same quarter in the prior year, the company posted $3.19 EPS. As a group, sell-side analysts forecast that McDonald's will post 12.88 EPS for the current year.

Insider Buying and Selling

In other McDonald's news, insider Joseph M. Erlinger sold 5,252 shares of the stock in a transaction on Wednesday, June 10th. The stock was 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 approximately $2,198,930.88. This represents a 40.44% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this link. 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 value of $769,108.68. Following the transaction, the executive vice president directly owned 6,268 shares of the company's stock, valued at $1,744,760.48. The trade was a 30.59% decrease in their position. The disclosure for this sale is available in the SEC filing. Company insiders own 0.26% of the company's stock.

Hedge Funds Weigh In On McDonald's

A number of large investors have recently modified their holdings of MCD. California State Teachers Retirement System grew its stake in McDonald's by 27,036.7% during the 2nd quarter. California State Teachers Retirement System now owns 302,891,546 shares of the fast-food giant's stock worth $81,874,614,000 after buying an additional 301,775,375 shares during the last quarter. Norges Bank bought a new position in shares of McDonald's in the fourth quarter valued at approximately $2,890,438,000. Bank of New York Mellon Corp acquired a new position in shares of McDonald's during the 2nd quarter valued at $1,359,276,000. Diamant Asset Management Inc. raised its position in McDonald's by 30,979.0% in the first quarter. Diamant Asset Management Inc. now owns 2,596,340 shares of the fast-food giant's stock worth $806,917,000 after acquiring an additional 2,587,986 shares in the last quarter. Finally, J. Stern & Co. LLP raised its holdings in shares of McDonald's by 9,867.5% in the 4th quarter. J. Stern & Co. LLP now owns 2,541,008 shares of the fast-food giant's stock worth $776,608,000 after purchasing an additional 2,515,515 shares in the last quarter. 70.29% of the stock is currently owned by hedge funds and other institutional investors.

Key McDonald's News

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

• Positive Sentiment: Analyst view improves: Robert W. Baird upgraded McDonald’s to “hold,” which is less negative than its previous rating and may provide modest support for MCD after the recent sell-off. McDonald’s analyst upgrade
• Positive Sentiment: Digital platform offers a growth opportunity: McDonald’s is nearing completion of a unified digital platform across major markets. The initiative could improve personalization, customer engagement and restaurant productivity, supporting sales and margins over time. McDonald’s unified digital platform
• Positive Sentiment: Menu innovation and hiring support traffic prospects: The return of Spicy Chicken McNuggets, limited-time Happy Meal promotions and new beverages—including offerings aimed at the growing cold-drink category—could help attract customers. Franchisees also plan to add more than 1,000 workers in South Florida, signaling local operating expansion. South Florida McDonald’s hiring

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.

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