McDonald's Corporation $MCD Position Increased by Investment Management Corp of Ontario

Key Points

• Investment Management Corp of Ontario boosted its McDonald's stake by 46.4% in the fourth quarter, buying 23,469 additional shares and bringing its total holdings to 74,090 shares worth about $22.6 million.
• Institutional ownership remains strong, with several other large funds also increasing positions and institutions collectively owning 70.29% of McDonald's stock.
• Analysts are mixed but mostly constructive: the stock has a Moderate Buy consensus with an average target price of $336.26, though some firms recently downgraded or trimmed price targets amid recent weakness.

Investment Management Corp of Ontario increased its stake in McDonald's Corporation (NYSE:MCD - Free Report) by 46.4% during the 4th quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission. The fund owned 74,090 shares of the fast-food giant's stock after purchasing an additional 23,469 shares during the period. Investment Management Corp of Ontario's holdings in McDonald's were worth $22,644,000 at the end of the most recent reporting period.

Several other hedge funds have also made changes to their positions in MCD. Norges Bank acquired a new position in shares of McDonald's in the 4th quarter worth $2,890,438,000. J. Stern & Co. LLP grew its holdings 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 valued at $776,608,000 after buying an additional 2,515,515 shares in the last quarter. Viking Global Investors LP grew its holdings in shares of McDonald's by 171.7% during the second quarter. Viking Global Investors LP now owns 3,125,432 shares of the fast-food giant's stock valued at $913,157,000 after buying an additional 1,974,998 shares in the last quarter. Franklin Resources Inc. grew its holdings in shares of McDonald's by 36.6% during the third quarter. Franklin Resources Inc. now owns 4,396,837 shares of the fast-food giant's stock valued at $1,336,155,000 after buying an additional 1,179,244 shares in the last quarter. Finally, Arrowstreet Capital Limited Partnership grew its holdings in shares of McDonald's by 111.3% during the third quarter. Arrowstreet Capital Limited Partnership now owns 2,071,296 shares of the fast-food giant's stock valued at $629,446,000 after buying an additional 1,090,849 shares in the last quarter. Institutional investors own 70.29% of the company's stock.

Insider Transactions at McDonald's

In other news, insider Joseph M. Erlinger sold 5,252 shares of the stock in a transaction dated Wednesday, June 10th. The shares were sold at an average price of $284.32, for a total transaction of $1,493,248.64. Following the completion of the transaction, the insider directly owned 7,734 shares in the company, valued at $2,198,930.88. This represents a 40.44% decrease in their position. The transaction was disclosed in a filing with the SEC, which is available at the SEC website. Also, EVP Desiree Ralls-Morrison sold 2,763 shares of the stock in a transaction dated Thursday, May 28th. The stock was 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 of the company's stock, valued at approximately $1,744,760.48. This represents a 30.59% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. In the last quarter, insiders have sold 11,307 shares of company stock valued at $3,262,622. Corporate insiders own 0.26% of the company's stock.

Analysts Set New Price Targets

A number of brokerages have recently weighed in on MCD. Weiss Ratings downgraded McDonald's from a "buy (b-)" rating to a "hold (c+)" rating in a report on Friday, May 29th. Rothschild & Co Redburn upgraded McDonald's from a "sell" rating to a "neutral" rating and lifted their price target for the company from $260.00 to $306.00 in a report on Thursday, April 23rd. TD Cowen reiterated a "hold" rating on shares of McDonald's in a report on Friday, June 12th. Barclays lowered their price target on McDonald's from $380.00 to $350.00 and set an "overweight" rating on the stock in a report on Friday, May 8th. Finally, Evercore set a $350.00 price target on McDonald's in a report on Friday, May 8th. Sixteen analysts have rated the stock with a Buy rating, thirteen have issued a Hold rating and one has issued a Sell rating to the company's stock. According to MarketBeat.com, the stock has an average rating of "Moderate Buy" and an average target price of $336.26.

Key Headlines Impacting McDonald's

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

• Positive Sentiment: McDonald’s is bringing back its fried apple pie after more than 30 years, a nostalgic, limited-time menu move that could support traffic and generate buzz with customers. AP News article
• Positive Sentiment: Other reports also note McDonald’s has been winning with value-oriented diners, which may help it hold up better than midtier restaurant chains as consumers trade down or seek familiar brands. Yahoo Finance article
• Neutral Sentiment: Coverage of McDonald’s reviving classic menu items, updating drive-thrus, and rebuilding older locations is mostly brand/operations news, with limited immediate impact on the stock. TheStreet article
• Neutral Sentiment: A Zacks note pointed out that MCD recently fell more than the broader market, but it did not identify a major new catalyst beyond the stock’s recent weakness. Zacks article
• Negative Sentiment: The biggest headwind is the market’s concern that restaurant spending is fragmenting, which could pressure midtier operators and keep sentiment cautious around consumer discretionary names like McDonald’s. Yahoo Finance article

McDonald's Stock Performance

McDonald's stock opened at $284.16 on Thursday. McDonald's Corporation has a 52 week low of $271.85 and a 52 week high of $341.75. The firm has a market capitalization of $201.90 billion, a PE ratio of 23.43, a PEG ratio of 2.87 and a beta of 0.41. The business's 50-day simple moving average is $288.07 and its 200-day simple moving average is $306.22.

McDonald's (NYSE:MCD - Get Free Report) last issued its quarterly earnings results on Thursday, May 7th. The fast-food giant reported $2.83 earnings per share (EPS) for the quarter, beating the consensus estimate of $2.74 by $0.09. McDonald's had a negative return on equity of 442.10% and a net margin of 31.62%.The firm had revenue of $6.52 billion for the quarter, compared to analyst estimates of $6.47 billion. During the same period in the previous year, the company posted $2.67 earnings per share. The company's quarterly revenue was up 9.4% compared to the same quarter last year. Research analysts forecast that McDonald's Corporation will post 12.93 earnings per share for the current year.

McDonald's Announces Dividend

The company also recently announced a quarterly dividend, which was paid on Tuesday, June 16th. Shareholders of record on Tuesday, June 2nd were issued a dividend of $1.86 per share. This represents a $7.44 dividend on an annualized basis and a yield of 2.6%. The ex-dividend date was Tuesday, June 2nd. McDonald's's dividend payout ratio is 61.34%.

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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