AIA Group Ltd Trims Stake in McDonald's Corporation $MCD

Key Points

• AIA Group cut its McDonald’s stake by 43% in the second quarter, selling 10,185 shares and retaining 13,497 shares valued at $3.65 million. Institutional investors collectively own 70.29% of MCD.
• McDonald’s reported quarterly EPS of $3.38, beating expectations of $3.32, while revenue of $7.10 billion fell slightly short of estimates. Shares opened at $267.15, near their one-year low of $260.96.
• The company declared a quarterly dividend of $1.86 per share, equivalent to a $7.44 annualized payout and a 2.8% yield. Analysts maintain a “Moderate Buy” consensus with a $325.44 price target, although weak U.S. traffic, cost pressures and competition remain concerns.

AIA Group Ltd reduced its stake in McDonald's Corporation (NYSE:MCD - Free Report) by 43.0% during the second quarter, according to the company in its most recent 13F filing with the SEC. The firm owned 13,497 shares of the fast-food giant's stock after selling 10,185 shares during the quarter. AIA Group Ltd's holdings in McDonald's were worth $3,648,000 at the end of the most recent quarter.

Other institutional investors and hedge funds also recently bought and sold shares of the company. Brighton Jones LLC raised its stake in shares of McDonald's by 21.6% in the fourth quarter. Brighton Jones LLC now owns 9,286 shares of the fast-food giant's stock worth $2,692,000 after buying an additional 1,649 shares during the period. Revolve Wealth Partners LLC grew its stake in shares of McDonald's by 2.8% during the 4th quarter. Revolve Wealth Partners LLC now owns 1,942 shares of the fast-food giant's stock valued at $563,000 after acquiring an additional 52 shares during the period. Sivia Capital Partners LLC increased its holdings in McDonald's by 11.4% in the 2nd quarter. Sivia Capital Partners LLC now owns 2,017 shares of the fast-food giant's stock worth $589,000 after acquiring an additional 206 shares in the last quarter. United Bank increased its holdings in McDonald's by 6.0% in the 2nd quarter. United Bank now owns 8,102 shares of the fast-food giant's stock worth $2,367,000 after acquiring an additional 459 shares in the last quarter. Finally, Schnieders Capital Management LLC. raised its stake in McDonald's by 2.5% during the 2nd quarter. Schnieders Capital Management LLC. now owns 12,938 shares of the fast-food giant's stock worth $3,780,000 after acquiring an additional 312 shares during the period. 70.29% of the stock is currently owned by hedge funds and other institutional investors.

McDonald's Price Performance

Shares of MCD stock opened at $267.15 on Wednesday. McDonald's Corporation has a 1 year low of $260.96 and a 1 year high of $341.75. The stock's 50 day simple moving average is $273.27 and its two-hundred day simple moving average is $294.49. The company has a market cap of $189.04 billion, a PE ratio of 21.70, a price-to-earnings-growth ratio of 3.05 and a beta of 0.41.

McDonald's (NYSE:MCD - Get Free Report) last announced its earnings results 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 firm had revenue of $7.10 billion during the quarter, compared to analysts' expectations of $7.13 billion. McDonald's had a negative return on equity of 572.06% and a net margin of 31.72%.The company's quarterly revenue was up 3.7% on a year-over-year basis. During the same quarter in the previous year, the business earned $3.19 EPS. Equities research analysts expect that McDonald's Corporation will post 12.88 EPS for the current year.

McDonald's Dividend Announcement

The company also recently disclosed a quarterly dividend, which will be paid on Wednesday, September 16th. Shareholders of record on Tuesday, September 1st will be paid a dividend of $1.86 per share. This represents a $7.44 annualized dividend and a yield of 2.8%. The ex-dividend date of this dividend is Tuesday, September 1st. McDonald's's payout ratio is presently 60.44%.

Key Headlines Impacting McDonald's

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

• Positive Sentiment: McDonald’s valuation has become more attractive after its decline, with one bullish estimate implying substantial upside toward the Wall Street consensus target. However, analysts say investors may need to wait for clearer evidence of improved execution. Is McDonald's a Buy Today as Lower Valuation Meets Execution Risk?
• Positive Sentiment: A workforce scheduling and transportation app reportedly helped one McDonald’s franchise avoid missed shifts and save about $35,000 per month. Wider adoption could improve staffing reliability and restaurant-level margins. Missed shifts were costly to this McDonald's. An app has fixed the problem
• Positive Sentiment: Limited-time promotions, including Hello Kitty–Godzilla Happy Meals, new fall beverages and an afternoon-focused menu strategy aimed at Starbucks could support traffic and increase customer occasions. McDonald's Takes Direct Aim at Starbucks
• Neutral Sentiment: McDonald’s latest quarterly earnings beat expectations on EPS, helped by franchised operations, but revenue slightly missed estimates. Investors remain focused on whether cost controls and franchise strength can offset softer U.S. demand. McDonald's Q2 Earnings Beat Puts U.S. Traffic and Margins in Focus
• Negative Sentiment: Numerator data showed sales among low-income customers fell 2.4% in the latest quarter, indicating that prior price increases may be pushing budget-conscious diners toward alternatives. McDonald's is losing ground to rivals like Burger King with a key customer group
• Negative Sentiment: Weak U.S. traffic, value-offer execution problems, rising beef and operating costs, and competition from Burger King are creating pressure on sales and margins. The broader economic concern flagged by restaurant and consumer-goods executives adds to the risk. Burger King is taking a bite out of McDonald's lunch

Insiders Place Their Bets

In other McDonald's news, EVP Desiree Ralls-Morrison sold 2,763 shares of the business's stock in a transaction on Thursday, May 28th. The shares were sold at an average price of $278.36, for a total transaction of $769,108.68. Following the transaction, the executive vice president owned 6,268 shares in the company, valued at $1,744,760.48. The trade was a 30.59% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available at this link. Also, insider Joseph M. Erlinger sold 5,252 shares of McDonald's stock in a transaction dated 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 transaction, the insider directly owned 7,734 shares of the company's stock, valued at approximately $2,198,930.88. This represents a 40.44% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold 8,348 shares of company stock worth $2,355,634 in the last quarter. Company insiders own 0.26% of the company's stock.

Analyst Ratings Changes

Several equities analysts have weighed in on MCD shares. Royal Bank Of Canada lowered their price target on shares of McDonald's from $305.00 to $295.00 and set a "sector perform" rating on the stock in a report on Wednesday, August 5th. TD Cowen restated a "hold" rating on shares of McDonald's in a research report on Tuesday, August 4th. Wells Fargo & Company lowered their target price on shares of McDonald's from $320.00 to $300.00 and set an "overweight" rating on the stock in a research note on Thursday, July 16th. Erste Group Bank downgraded shares of McDonald's from a "buy" rating to a "hold" rating in a report on Monday, April 27th. Finally, Tigress Financial increased their price target on McDonald's from $385.00 to $390.00 and gave the stock a "buy" rating in a research note on Friday, July 17th. One investment analyst has rated the stock with a Strong Buy rating, fifteen have given a Buy rating and twelve have issued a Hold rating to the company. According to data from MarketBeat, the stock presently has an average rating of "Moderate Buy" and a consensus target price of $325.44.

About McDonald's

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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