McDonald's Corporation $MCD Stock Sold by Confluence Investment Management LLC

Key Points

• Confluence Investment Management LLC reduced its McDonald’s stake by 9.9%, selling 6,491 shares and retaining 59,362 shares valued at approximately $13.7 million. Institutional investors and hedge funds collectively own 70.29% of the company.
• McDonald’s shares rose 0.4% to $231.93 but remained near their 12-month low of $229.61, well below the 12-month high of $341.75. Analysts maintained a consensus “Moderate Buy” rating with an average price target of $300.64.
• The company reported quarterly earnings of $3.38 per share, slightly above estimates, and increased its quarterly dividend to $1.93 per share, representing an annualized yield of about 3.3%.

Confluence Investment Management LLC trimmed its stake in shares of McDonald's Corporation (NYSE:MCD - Free Report) by 9.9% in the third quarter, according to its most recent 13F filing with the Securities and Exchange Commission. The firm owned 59,362 shares of the fast-food giant's stock after selling 6,491 shares during the quarter. Confluence Investment Management LLC's holdings in McDonald's were worth $13,709,000 as of its most recent filing with the Securities and Exchange Commission.

A number of other institutional investors have also modified their holdings of MCD. Abound Financial LLC acquired a new stake in shares of McDonald's during the fourth quarter worth $30,000. Purpose Unlimited Inc. acquired a new position in McDonald's in the 4th quarter valued at $31,000. GKV Capital Management Co. Inc. purchased a new position in McDonald's during the 1st quarter worth $33,000. Merkkuri Wealth Advisors LLC purchased a new position in McDonald's during the first quarter worth about $43,000. Finally, POM Investment Strategies LLC increased its position in McDonald's by 46.2% during the 2nd quarter. POM Investment Strategies LLC now owns 174 shares of the fast-food giant's stock worth $47,000 after purchasing an additional 55 shares during the period. Institutional investors and hedge funds own 70.29% of the company's stock.

McDonald's Stock Up 0.4%

Shares of MCD traded up $0.99 on Thursday, reaching $231.93. The stock had a trading volume of 2,713,876 shares, compared to its average volume of 4,138,482. The firm has a market capitalization of $164.12 billion, a PE ratio of 18.85, a PEG ratio of 2.61 and a beta of 0.41. The firm has a 50-day moving average of $260.30 and a 200 day moving average of $278.44. McDonald's Corporation has a twelve month low of $229.61 and a twelve month high of $341.75.

McDonald's (NYSE:MCD - Get Free Report) last announced its quarterly earnings results on Tuesday, August 4th. The fast-food giant reported $3.38 earnings per share for the quarter, beating analysts' consensus estimates of $3.32 by $0.06. The business 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 business's revenue for the quarter was up 3.7% on a year-over-year basis. During the same quarter last year, the business posted $3.19 earnings per share. On average, sell-side analysts anticipate that McDonald's Corporation will post 12.85 earnings per share for the current fiscal year.

McDonald's Increases Dividend

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

Wall Street Analyst Weigh In

A number of equities analysts have recently issued reports on the company. Deutsche Bank Aktiengesellschaft cut their target price on McDonald's from $325.00 to $300.00 and set a "buy" rating for the company in a research note on Monday, September 14th. Gordon Haskett dropped their price objective on McDonald's from $315.00 to $285.00 and set a "buy" rating on the stock in a report on Thursday, September 24th. Argus reduced their target price on McDonald's from $320.00 to $310.00 and set a "buy" rating for the company in a report on Wednesday, August 26th. BTIG Research decreased their target price on shares of McDonald's from $350.00 to $295.00 and set a "buy" rating on the stock in a research report on Thursday, September 24th. Finally, KeyCorp reaffirmed an "overweight" rating and set a $305.00 price target (down from $315.00) on shares of McDonald's in a research note on Monday, September 21st. One equities research analyst has rated the stock with a Strong Buy rating, twenty-two have issued a Buy rating, thirteen have issued a Hold rating and one has given a Sell rating to the stock. Based on data from MarketBeat.com, the stock presently has a consensus rating of "Moderate Buy" and an average target price of $300.64.

Key Stories Impacting McDonald's

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

• Positive Sentiment: McDonald’s is expanding its beverage business, which could increase restaurant visits, average order values and cash flow as the company rolls the platform out across additional international markets. Can McDonald's Beverage Expansion Become Its Next Global Growth Wave?
• Positive Sentiment: The company’s loyalty program and planned rewards enhancements, including Disney+ and Uber credits, are intended to reactivate infrequent customers and encourage larger or more frequent orders. McDonald’s has nearly 220 million active loyalty members over a 90-day period. McDonald’s has a plan to win back 150 million customers
• Positive Sentiment: Management’s $8.5 billion modernization initiative, including the Archy AI drive-thru assistant, is designed to improve restaurant efficiency and margins. Successful deployment could support long-term cash-flow growth, although an earlier AI ordering effort reportedly produced too many errors. Meet Archy: McDonald’s AI Drive-Thru Assistant
• Neutral Sentiment: McDonald’s is testing AI-assisted menu pricing that uses local market and transaction data to recommend restaurant- and item-level prices, while franchisees retain final control. The strategy could improve margins and personalize promotions, but its financial contribution has not been quantified. McDonald’s Stock Slump Makes Its AI Pricing Bet Even Riskier
• Negative Sentiment: Investors are concerned that location-based or “willingness-to-pay” pricing could create large price differences between nearby restaurants and trigger a consumer backlash similar to Wendy’s experience with dynamic-pricing messaging. McDonald’s has rejected the idea that it is secretly setting prices based on individual customers. McDonald's AI Menu Pricing Creates Big Cost Gaps
• Negative Sentiment: The market is questioning whether the $8.5 billion investment will pressure near-term margins and whether the company can generate sufficient traffic growth in a value-conscious consumer environment. McDonald’s has suffered an unprecedented eight-week decline and is down about 24% year to date. McDonald’s Stock Plunges to 52-Week Low
• Negative Sentiment: Jefferies cut its price target, while another analyst downgrade helped push the shares to a new one-year low. Rising bond yields are also weighing on the appeal of McDonald’s dividend and high-debt business model. McDonald's Stock Price Target Cut by Jefferies

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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