McDonald's Corporation (NYSE:MCD) Receives Average Rating of "Moderate Buy" from Brokerages

Key Points

• Analysts remain moderately bullish: Twenty-seven brokerages give McDonald’s a consensus “Moderate Buy” rating, with 15 buys, 11 holds and one strong buy. The average 12-month price target is approximately $316.39.
• Institutional ownership is substantial: Hedge funds and other institutional investors own 70.29% of McDonald’s shares, with major firms including Norges Bank, Bank of New York Mellon and Arrowstreet Capital recently building positions.
• Growth concerns temper the outlook: McDonald’s is working on a longer-term value strategy, menu innovation and restaurant remodels to address weak U.S. sales and execution issues. The company continues to offer income appeal after raising its quarterly dividend to $1.93 per share, marking 50 consecutive years of dividend growth.

Shares of McDonald's Corporation (NYSE:MCD - Get Free Report) have been assigned a consensus recommendation of "Moderate Buy" from the twenty-seven research firms that are currently covering the firm, MarketBeat Ratings reports. Eleven investment analysts have rated the stock with a hold recommendation, fifteen have given a buy recommendation and one has given a strong buy recommendation to the company. The average 12 month price target among brokers that have issued ratings on the stock in the last year is $316.3913.

MCD has been the topic of a number of recent research reports. Mizuho dropped their price objective on McDonald's from $300.00 to $290.00 and set a "neutral" rating on the stock in a report on Friday, July 31st. Seaport Research Partners assumed coverage on shares of McDonald's in a report on Wednesday. They issued a "neutral" rating on the stock. Sanford C. Bernstein reaffirmed a "market perform" rating and set a $295.00 price objective on shares of McDonald's in a research note on Wednesday, August 5th. Wells Fargo & Company decreased their target price on shares of McDonald's from $320.00 to $300.00 and set an "overweight" rating on the stock in a report on Thursday, July 16th. Finally, Guggenheim lowered their target price on shares of McDonald's from $320.00 to $290.00 and set a "neutral" rating on the stock in a research note on Wednesday, August 5th.

Institutional Investors Weigh In On McDonald's

Institutional investors and hedge funds have recently made changes to their positions in the business. Norges Bank purchased a new position in shares of McDonald's in the 4th quarter worth about $2,890,438,000. Bank of New York Mellon Corp purchased a new position in shares of McDonald's during the 2nd quarter valued at about $1,359,276,000. Diamant Asset Management Inc. lifted its position in McDonald's by 30,979.0% in the 1st quarter. Diamant Asset Management Inc. now owns 2,596,340 shares of the fast-food giant's stock worth $806,917,000 after buying an additional 2,587,986 shares during the last quarter. J. Stern & Co. LLP lifted its position in 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 buying an additional 2,515,515 shares during the last quarter. Finally, Arrowstreet Capital Limited Partnership boosted its stake 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 worth $948,779,000 after buying an additional 1,033,041 shares in the last quarter. 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 declared a quarterly dividend of $1.93 per share, a 4% increase, marking 50 consecutive years of dividend growth and earning the company “Dividend King” status. The dividend supports MCD’s appeal to income-focused investors. McDonald's Marks 50 Consecutive Years of Dividend Increases
• Positive Sentiment: McDonald’s is reportedly developing a longer-term value strategy with franchisees to attract price-sensitive customers and revive U.S. sales growth. Menu innovation, restaurant remodels, and improved execution could support traffic if implemented effectively. McDonald's Said to Plan Value Strategy Overhaul
• Neutral Sentiment: Analyst opinions remain mixed. Citigroup lowered its price target from $345 to $310 but retained a Buy rating, while BTIG reaffirmed Buy with a $350 target. The targets imply substantial upside, but the reductions highlight weaker near-term expectations. Citigroup Lowers McDonald's Price Target
• Neutral Sentiment: Analysts are focused on McDonald’s upcoming strategic update, including possible menu innovation, remodels, and medium-term growth initiatives. Investors appear to need clearer evidence that these investments can improve sales and execution. McDonald's May Focus on Menu Innovation and Remodels
• Negative Sentiment: Reports describe weak U.S. sales growth, an increasingly divided consumer base, and management’s acknowledgment of execution problems. The shift toward addressing restaurant-level issues raises concerns about whether McDonald’s can quickly restore traffic and value perception. McDonald's CEO Admits Execution Failure
• Negative Sentiment: Unusually heavy put-option activity—47,332 puts, approximately 66% above typical volume—signals increased hedging or bearish speculation around MCD. This may add short-term pressure even though it does not guarantee further declines.

McDonald's Trading Down 0.0%

Shares of MCD stock opened at $248.50 on Friday. The firm's 50 day moving average is $265.51 and its 200 day moving average is $284.11. The stock has a market capitalization of $175.85 billion, a P/E ratio of 20.19, a PEG ratio of 2.69 and a beta of 0.41. McDonald's has a 12 month low of $247.83 and a 12 month high of $341.75.

McDonald's (NYSE:MCD - Get Free Report) last issued its earnings results 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. The business had revenue of $7.10 billion for 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% compared to the same quarter last year. During the same quarter in the previous year, the firm posted $3.19 EPS. On average, equities analysts predict that McDonald's will post 12.87 EPS for the current year.

McDonald's Dividend Announcement

The company also recently declared a quarterly dividend, which was paid on Wednesday, September 16th. Stockholders of record on Tuesday, September 1st were given a dividend of $1.86 per share. This represents a $7.44 dividend on an annualized basis and a dividend yield of 3.0%. The ex-dividend date was Tuesday, September 1st. McDonald's's payout ratio is 60.44%.

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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