Levin Capital Strategies L.P. Buys 12,303 Shares of McDonald's Corporation $MCD

Key Points

• Levin Capital Strategies increased its McDonald’s stake by 997% in the second quarter, purchasing 12,303 additional shares for a total holding valued at approximately $3.66 million. Institutional investors collectively own 70.29% of the company.
• McDonald’s beat quarterly EPS expectations at $3.38 versus $3.32, while revenue of $7.10 billion slightly missed estimates. Shares opened at $267.15, near their one-year low, and analysts maintain a “Moderate Buy” consensus with an average price target of $325.44.
• The company faces pressure from weak U.S. traffic, declining sales among low-income customers, higher beef and operating costs, and competition from Burger King. Promotional campaigns and workforce-management technology could support traffic and margins, while McDonald’s continues to offer a quarterly dividend of $1.86.

Levin Capital Strategies L.P. boosted its position in McDonald's Corporation (NYSE:MCD - Free Report) by 997.0% in the second quarter, according to its most recent Form 13F filing with the SEC. The institutional investor owned 13,537 shares of the fast-food giant's stock after purchasing an additional 12,303 shares during the quarter. Levin Capital Strategies L.P.'s holdings in McDonald's were worth $3,659,000 at the end of the most recent reporting period.

Other hedge funds have also modified their holdings of the company. Your Advocates Ltd. LLP purchased a new position in shares of McDonald's in the 4th quarter worth approximately $27,000. IFC & Insurance Marketing Inc. purchased a new stake in McDonald's during the fourth quarter valued at approximately $29,000. Abound Financial LLC acquired a new stake in McDonald's in the fourth quarter valued at approximately $30,000. DecisionPoint Financial LLC grew its holdings in McDonald's by 1,616.7% in the fourth quarter. DecisionPoint Financial LLC now owns 103 shares of the fast-food giant's stock worth $31,000 after purchasing an additional 97 shares during the last quarter. Finally, Entrust Financial LLC purchased a new position in McDonald's in the fourth quarter worth $31,000. 70.29% of the stock is owned by hedge funds and other institutional investors.

McDonald's News Summary

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

Analysts Set New Price Targets

MCD has been the subject of several analyst reports. JPMorgan Chase & Co. decreased their price objective on McDonald's from $325.00 to $305.00 and set an "overweight" rating for the company in a report on Monday, May 11th. Deutsche Bank Aktiengesellschaft upped their target price on McDonald's from $335.00 to $345.00 and gave the company a "buy" rating in a research report on Wednesday, August 5th. Robert W. Baird lowered their price target on McDonald's from $305.00 to $285.00 and set a "neutral" rating for the company in a report on Wednesday, August 5th. Evercore set a $320.00 price target on McDonald's in a research note on Thursday, July 23rd. Finally, Rothschild & Co Redburn upgraded shares of McDonald's from a "sell" rating to a "neutral" rating and upped their price objective for the company from $260.00 to $306.00 in a report on Thursday, April 23rd. One analyst has rated the stock with a Strong Buy rating, fifteen have assigned a Buy rating and twelve have assigned a Hold rating to the company. Based on data from MarketBeat, the company has an average rating of "Moderate Buy" and an average target price of $325.44.

McDonald's Price Performance

Shares of MCD stock opened at $267.15 on Wednesday. The firm has a market capitalization of $189.04 billion, a price-to-earnings ratio of 21.70, a price-to-earnings-growth ratio of 3.05 and a beta of 0.41. The business has a fifty day moving average of $273.27 and a 200 day moving average of $294.49. McDonald's Corporation has a 1 year low of $260.96 and a 1 year high of $341.75.

McDonald's (NYSE:MCD - Get Free Report) last posted its quarterly earnings results on Tuesday, August 4th. The fast-food giant reported $3.38 earnings per share for the quarter, beating the consensus estimate of $3.32 by $0.06. The business had revenue of $7.10 billion for the quarter, compared to the consensus estimate 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% compared to the same quarter last year. During the same quarter in the previous year, the business earned $3.19 EPS. As a group, equities research analysts expect that McDonald's Corporation will post 12.88 earnings per share for the current year.

McDonald's Dividend Announcement

The firm also recently declared a quarterly dividend, which will be paid on Wednesday, September 16th. Investors of record on Tuesday, September 1st will be issued a $1.86 dividend. This represents a $7.44 annualized dividend and a yield of 2.8%. The ex-dividend date is Tuesday, September 1st. McDonald's's dividend payout ratio is 60.44%.

Insider Activity at McDonald's

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

McDonald's Company Profile

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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