Sanford C. Bernstein Has Lowered Expectations for McDonald's (NYSE:MCD) Stock Price

Key Points

• Sanford C. Bernstein lowered McDonald’s price target from $295 to $250 while maintaining a “market perform” rating, implying 8.36% upside from the reported $230.71 share price.
• Analyst sentiment remains broadly positive but has weakened, with McDonald’s holding a consensus “Moderate Buy” rating and an average price target of $295.94 amid several recent target reductions.
• McDonald’s reported quarterly EPS of $3.38, exceeding estimates, while revenue reached $7.10 billion and increased 3.7% year over year; institutional investors own approximately 70.29% of the stock.

McDonald's (NYSE:MCD - Get Free Report) had its target price dropped by analysts at Sanford C. Bernstein from $295.00 to $250.00 in a report issued on Thursday, Benzinga reports. The firm currently has a "market perform" rating on the fast-food giant's stock. Sanford C. Bernstein's target price would indicate a potential upside of 8.36% from the company's current price.

MCD has been the topic of a number of other research reports. BMO Capital Markets lowered their target price on McDonald's from $335.00 to $310.00 and set an "outperform" rating on the stock in a research report on Thursday, September 24th. Robert W. Baird reduced their price target on McDonald's from $285.00 to $250.00 and set a "neutral" rating for the company in a research report on Thursday, September 24th. HC Wainwright set a $250.00 target price on shares of McDonald's in a research note on Friday, September 25th. Rothschild & Co Redburn dropped their price target on shares of McDonald's from $306.00 to $285.00 in a research report on Wednesday, August 26th. Finally, Argus dropped their target price on shares of McDonald's from $320.00 to $310.00 and set a "buy" rating on the stock in a report on Wednesday, August 26th. One equities research analyst has rated the stock with a Strong Buy rating, twenty-two have given a Buy rating, thirteen have issued a Hold rating and one has given a Sell rating to the company. Based on data from MarketBeat, McDonald's has a consensus rating of "Moderate Buy" and an average price target of $295.94.

McDonald's Stock Down 0.7%

NYSE:MCD opened at $230.71 on Thursday. The company has a market cap of $163.26 billion, a P/E ratio of 18.74, a price-to-earnings-growth ratio of 2.60 and a beta of 0.44. McDonald's has a twelve month low of $229.20 and a twelve month high of $341.75. The business has a 50 day moving average price of $256.66 and a two-hundred day moving average price of $275.31.

McDonald's (NYSE:MCD - Get Free Report) last announced its quarterly earnings data on Tuesday, August 4th. The fast-food giant reported $3.38 EPS for the quarter, topping analysts' consensus estimates of $3.32 by $0.06. The business had revenue of $7.10 billion for the quarter, compared to analyst estimates of $7.13 billion. McDonald's had a net margin of 31.72% and a negative return on equity of 572.06%. The firm's revenue for the quarter was up 3.7% on a year-over-year basis. During the same quarter in the previous year, the firm posted $3.19 earnings per share. As a group, analysts anticipate that McDonald's will post 12.85 earnings per share for the current fiscal year.

Institutional Investors Weigh In On McDonald's

Hedge funds and other institutional investors have recently modified their holdings of the company. State Street Corp raised its stake in 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 worth $10,997,789,000 after purchasing an additional 959,140 shares in the last quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC increased its holdings in shares of McDonald's by 7.4% during the fourth quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC now owns 5,560,037 shares of the fast-food giant's stock worth $1,699,314,000 after purchasing an additional 384,762 shares during the period. Bank of New York Mellon Corp bought a new position in shares of McDonald's during the second quarter worth approximately $1,359,276,000. Arrowstreet Capital Limited Partnership increased its holdings in shares of McDonald's by 17.2% during the first quarter. Arrowstreet Capital Limited Partnership now owns 3,637,785 shares of the fast-food giant's stock worth $1,130,587,000 after purchasing an additional 533,448 shares during the period. Finally, Diamant Asset Management Inc. raised its position in shares of 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 valued at $806,917,000 after buying an additional 2,587,986 shares in the last quarter. Institutional investors and hedge funds own 70.29% of the company's stock.

More McDonald's News

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

• Positive Sentiment: McDonald’s increased its quarterly dividend and announced the decision earlier than usual, signaling continued confidence in returning cash to shareholders. The appointment of a new president for its U.S. business could also support efforts to address softer domestic traffic. What Is McDonald's Signaling With Its Faster Dividend And New US Chief?
• Positive Sentiment: KeyCorp lowered its price target to $280 from $305 but retained an “overweight” rating, implying substantial potential upside from the recent trading level. McDonald's Given New $280 Price Target at KeyCorp
• Neutral Sentiment: The company is investing approximately $8.5 billion in its “McDonald’s Next” modernization program, including remodeled restaurants and an effort to make locations more inviting. A potential PlayPlace comeback could improve the customer experience, but the strategy’s sales benefits remain unproven. McDonald’s Wants Its Franchisees to Modernize
• Negative Sentiment: McDonald’s faces proposed federal antitrust class actions alleging that an AI-powered pricing tool shared nonpublic store-level sales and pricing data among competing franchisees, facilitating coordinated menu prices. McDonald’s says the system only recommends prices and does not set them, but litigation could create regulatory, financial and reputational risks. McDonald’s sued over alleged AI-powered menu price-fixing
• Negative Sentiment: U.S. franchisees are reportedly resisting upgrade costs of at least $800,000 per restaurant, threatening execution of the modernization plan and potentially increasing franchisee tensions. McDonald’s franchisees push back on remodeling costs
• Negative Sentiment: Promotional $5 meals and $6 combos have not clearly restored customer visits, while reports of smaller portions and higher prices reinforce concerns about value perception and weakening traffic. $5 meals, $6 combos and fewer visits

McDonald's Company Profile

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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