BTIG Research Issues Pessimistic Forecast for McDonald's (NYSE:MCD) Stock Price

Key Points

• BTIG Research cut McDonald’s price target from $350 to $295 but maintained a “buy” rating, implying roughly 23.9% upside from the prior close.
• McDonald’s shares opened at $238.11, down 4.9%, near their 12-month low and below both the 50-day and 200-day moving averages. Despite the decline, analysts maintain a “Moderate Buy” consensus with an average target of $313.96.
• The company slightly exceeded quarterly EPS expectations, reporting $3.38 versus $3.32, while revenue reached $7.10 billion and rose 3.7% year over year. Institutional investors own approximately 70.3% of the stock.

McDonald's (NYSE:MCD - Get Free Report) had its price objective cut by stock analysts at BTIG Research from $350.00 to $295.00 in a report released on Thursday, Benzinga reports. The firm currently has a "buy" rating on the fast-food giant's stock. BTIG Research's price objective indicates a potential upside of 23.89% from the stock's previous close.

MCD has been the topic of several other reports. Mizuho cut their price target on shares of McDonald's from $300.00 to $290.00 and set a "neutral" rating on the stock in a report on Friday, July 31st. Freedom Capital raised McDonald's from a "hold" rating to a "strong-buy" rating in a report on Wednesday, August 5th. Guggenheim decreased their price objective on shares of McDonald's from $320.00 to $290.00 and set a "neutral" rating for the company in a research report on Wednesday, August 5th. Royal Bank Of Canada dropped their target price on shares of McDonald's from $295.00 to $290.00 and set a "sector perform" rating on the stock in a research report on Tuesday, September 15th. Finally, Robert W. Baird upgraded shares of McDonald's to a "hold" rating in a research note on Monday, August 24th. One analyst has rated the stock with a Strong Buy rating, seventeen have assigned a Buy rating and eleven have issued a Hold rating to the company's stock. According to data from MarketBeat, the company currently has an average rating of "Moderate Buy" and an average target price of $313.96.

McDonald's Trading Down 4.9%

MCD opened at $238.11 on Thursday. The business's fifty day simple moving average is $263.58 and its 200-day simple moving average is $281.71. The company has a market capitalization of $168.50 billion, a price-to-earnings ratio of 19.34, a PEG ratio of 2.71 and a beta of 0.41. McDonald's has a 12-month low of $234.03 and a 12-month high of $341.75.

McDonald's (NYSE:MCD - Get Free Report) last released its quarterly earnings data on Tuesday, August 4th. The fast-food giant reported $3.38 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $3.32 by $0.06. McDonald's had a net margin of 31.72% and a negative return on equity of 572.06%. The firm had revenue of $7.10 billion for the quarter, compared to the consensus estimate of $7.13 billion. During the same period last year, the firm earned $3.19 earnings per share. The company's quarterly revenue was up 3.7% on a year-over-year basis. On average, equities research analysts predict that McDonald's will post 12.88 EPS for the current year.

Institutional Trading of McDonald's

Hedge funds have recently added to or reduced their stakes in the company. Norges Bank purchased a new stake in shares of McDonald's during the 4th quarter worth about $2,890,438,000. Bank of New York Mellon Corp acquired a new position in McDonald's in the 2nd quarter worth about $1,359,276,000. Diamant Asset Management Inc. boosted its position in McDonald's by 30,979.0% during 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 purchasing an additional 2,587,986 shares in the last quarter. J. Stern & Co. LLP boosted its position in McDonald's by 9,867.5% during the fourth 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. Finally, Arrowstreet Capital Limited Partnership grew its holdings in McDonald's by 49.9% in the fourth quarter. Arrowstreet Capital Limited Partnership now owns 3,104,337 shares of the fast-food giant's stock valued at $948,779,000 after purchasing an additional 1,033,041 shares during the period. 70.29% of the stock is owned by hedge funds and other institutional investors.

Key Headlines Impacting McDonald's

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

• Positive Sentiment: McDonald’s raised its quarterly dividend by nearly 4%, reinforcing its appeal to income-focused investors and signaling confidence in long-term cash generation. McDonald’s Increased Its Dividend by Nearly 4%
• Positive Sentiment: The company unveiled its NEXT strategy, including restaurant remodels, employee training, improved food and service, hand-breaded and grilled chicken offerings, expanded beverages, and AI-enabled ordering technology. Management expects these investments to improve restaurant economics and support market-share gains over time. McDonald's will spend big on restaurant upgrades
• Positive Sentiment: McDonald’s is testing a restaurant media network, including advertising on digital ordering boards, with a long-term goal of building a potentially meaningful new revenue stream. Why McDonald's is following Walmart and Amazon into advertising
• Neutral Sentiment: The company plans to bring back its Monopoly promotion on October 6, including a $1 million cash prize, in an effort to increase customer engagement. The promotion could help traffic but is unlikely to address the company’s broader cost and execution challenges by itself. McDonald's Takes a Chance by Bringing Back Monopoly
• Negative Sentiment: McDonald’s expects industry traffic in its wholly owned markets to remain flat while inflation stays elevated. CEO Chris Kempczinski said management is not expecting meaningful near-term improvement, raising concerns about weak sales growth and prolonged pressure on consumers. McDonald's expects inflation to keep traffic flat
• Negative Sentiment: The centerpiece of NEXT is approximately $8.5 billion in franchisee support through 2036, including about $5 billion through 2030 for rent relief, remodels, equipment, technology and training. Investors viewed the large, front-loaded commitment as a risk to cash flow, margins and shareholder returns before the benefits materialize. Why McDonald's Shares Are Plunging Today
• Negative Sentiment: Analysts and investors questioned whether chicken innovation, restaurant refreshes and technology upgrades will generate enough incremental traffic to justify the spending, particularly as competition rises and consumers remain value-conscious.

About McDonald's

McDonald's Corporation is a global quick-service restaurant company that operates and franchises restaurants under the McDonald's brand. Its restaurants serve a menu that includes hamburgers, cheeseburgers, chicken sandwiches, French fries, breakfast items, desserts, salads, beverages and coffee. Offerings vary by market, and many locations provide drive-thru service, delivery and digital ordering through the McDonald's mobile app.

The company operates through a heavily franchised business model, with restaurants owned and operated by independent franchisees, affiliates and the company itself.

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