McDonald's Corporation (NYSE:MCD) Stock Rated "Moderate Buy" by Sell-Side Brokerages

Key Points

• Analysts remain moderately bullish: McDonald’s has a consensus “Moderate Buy” rating from 37 brokerages, with an average 12-month price target of $295.94 versus the reported share price of $235.67.
• The company’s latest quarterly results exceeded earnings expectations, with EPS of $3.38 versus a $3.32 consensus estimate, while revenue rose 3.7% year over year to $7.10 billion.
• McDonald’s increased its quarterly dividend to $1.93 per share, or $7.72 annually, representing a 3.3% yield; institutional investors collectively own 70.29% of the stock.

Shares of McDonald's Corporation (NYSE:MCD - Get Free Report) have been assigned a consensus rating of "Moderate Buy" from the thirty-seven brokerages that are covering the stock, MarketBeat.com reports. One analyst has rated the stock with a sell rating, thirteen have issued a hold rating, twenty-two have assigned a buy rating and one has assigned a strong buy rating to the company. The average 1-year price target among analysts that have updated their coverage on the stock in the last year is $295.94.

Several equities analysts have issued reports on MCD shares. Needham & Company LLC restated a "buy" rating on shares of McDonald's in a research note on Monday, September 21st. Daiwa Securities Group cut their target price on McDonald's from $309.00 to $293.00 and set an "outperform" rating on the stock in a research report on Thursday, August 6th. Wells Fargo & Company cut their target price on McDonald's from $300.00 to $270.00 and set an "overweight" rating on the stock in a research report on Monday, October 5th. Tigress Financial boosted their target price on McDonald's from $385.00 to $390.00 and gave the company a "buy" rating in a report on Friday, July 17th. Finally, Bank of America upped their target price on McDonald's from $339.00 to $343.00 in a research report on Wednesday, August 5th.

More McDonald's News

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

• Positive Sentiment: A former hedge fund manager described McDonald’s as “moderately undervalued,” suggesting that the company’s global brand, franchise-heavy model and cash generation may be underappreciated after the selloff. McDonald’s Stock Moderately Undervalued
• Positive Sentiment: McDonald’s powerful brand, franchise model and growing dividend continue to provide a defensive investment case, although investors need stronger sales growth to justify the shares. McDonald’s Has a Powerful Brand and a Growing Dividend

Institutional Investors Weigh In On McDonald's

Institutional investors and hedge funds have recently added to or reduced their stakes in the company. Bank of New York Mellon Corp acquired a new stake in McDonald's in 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 valued at $806,917,000 after purchasing an additional 2,587,986 shares during the period. J. Stern & Co. LLP lifted its stake in shares of 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. Corient Private Wealth LLC lifted its stake in shares of McDonald's by 94.7% during the fourth quarter. Corient Private Wealth LLC now owns 1,644,109 shares of the fast-food giant's stock worth $502,489,000 after purchasing an additional 799,462 shares in the last quarter. Finally, Bessemer Group Inc. boosted its position in shares of McDonald's by 132.1% in the first quarter. Bessemer Group Inc. now owns 1,325,880 shares of the fast-food giant's stock worth $412,071,000 after buying an additional 754,596 shares during the period. Hedge funds and other institutional investors own 70.29% of the company's stock.

McDonald's Trading Up 0.2%

Shares of McDonald's stock opened at $235.67 on Tuesday. The company has a fifty day simple moving average of $254.71 and a 200-day simple moving average of $273.77. McDonald's has a 12-month low of $229.20 and a 12-month high of $341.75. The stock has a market cap of $166.77 billion, a price-to-earnings ratio of 19.14, a PEG ratio of 2.64 and a beta of 0.44.

McDonald's (NYSE:MCD - Get Free Report) last announced its quarterly earnings results on Tuesday, August 4th. The fast-food giant reported $3.38 EPS for the quarter, topping the consensus estimate 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 analyst estimates of $7.13 billion. During the same period last year, the business earned $3.19 EPS. McDonald's's revenue for the quarter was up 3.7% compared to the same quarter last year. On average, analysts forecast that McDonald's will post 12.85 earnings per share for the current fiscal year.

McDonald's Increases Dividend

The company also recently declared a quarterly dividend, which will be paid on Tuesday, December 15th. Investors of record on Tuesday, December 1st will be paid a dividend of $1.93 per share. The ex-dividend date is Tuesday, December 1st. This represents a $7.72 dividend on an annualized basis and a yield of 3.3%. This is a boost from McDonald's's previous quarterly dividend of $1.86. McDonald's's dividend payout ratio (DPR) is 60.44%.

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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