McDonald's Corporation (NYSE:MCD) Given Average Recommendation of "Moderate Buy" by Analysts

Key Points

• Analysts remain constructive on McDonald’s, with 30 firms giving it a consensus “Moderate Buy” rating. The average 1-year price target is about $336.26, though one analyst rates it a sell and 13 rate it a hold.
• Recent earnings topped expectations, as McDonald’s reported $2.83 EPS versus the $2.74 consensus and revenue of $6.52 billion, up 9.4% year over year. The company also reiterated its strong cash-return profile with a quarterly dividend of $1.86 per share.
• Operational and growth catalysts are in focus, including AI ordering pilots at select U.S. drive-thrus and limited-time World Cup meal promotions. These initiatives could support efficiency and traffic, even as some news notes workplace-culture concerns that may weigh on sentiment.

Shares of McDonald's Corporation (NYSE:MCD - Get Free Report) have been given a consensus recommendation of "Moderate Buy" by the thirty ratings firms that are covering the firm, MarketBeat reports. One investment analyst has rated the stock with a sell rating, thirteen have assigned a hold rating and sixteen have issued a buy rating on the company. The average 1-year price target among analysts that have issued ratings on the stock in the last year is $336.2593.

Several analysts recently issued reports on the company. Weiss Ratings cut McDonald's from a "buy (b-)" rating to a "hold (c+)" rating in a research report on Friday, May 29th. Wells Fargo & Company cut their target price on McDonald's from $355.00 to $320.00 and set an "overweight" rating for the company in a research report on Friday, May 8th. UBS Group increased their target price on McDonald's from $350.00 to $365.00 and gave the stock a "buy" rating in a research report on Thursday, February 12th. Tigress Financial increased their target price on McDonald's from $360.00 to $385.00 and gave the stock a "buy" rating in a research report on Friday, March 6th. Finally, Evercore set a $350.00 price target on McDonald's in a report on Friday, May 8th.

McDonald's Trading Up 1.5%

NYSE:MCD opened at $282.08 on Wednesday. McDonald's has a 12-month low of $271.85 and a 12-month high of $341.75. The stock has a 50-day moving average price of $290.86 and a 200 day moving average price of $307.22. The stock has a market capitalization of $200.42 billion, a P/E ratio of 23.25, a P/E/G ratio of 2.77 and a beta of 0.41.

McDonald's (NYSE:MCD - Get Free Report) last released its earnings results on Thursday, May 7th. The fast-food giant reported $2.83 earnings per share (EPS) for the quarter, topping 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 during the quarter, compared to analysts' expectations of $6.47 billion. During the same quarter last year, the business posted $2.67 earnings per share. The firm's revenue was up 9.4% on a year-over-year basis. On average, research analysts predict that McDonald's will post 12.93 earnings per share for the current fiscal year.

McDonald's Announces Dividend

The company also recently declared a quarterly dividend, which will be paid on Tuesday, June 16th. Shareholders of record on Tuesday, June 2nd will be issued a dividend of $1.86 per share. This represents a $7.44 annualized dividend and a yield of 2.6%. The ex-dividend date is Tuesday, June 2nd. McDonald's's dividend payout ratio (DPR) is currently 61.34%.

McDonald's News Summary

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

• Positive Sentiment: McDonald’s is piloting AI ordering systems at select U.S. drive-thrus, a move that could reduce labor friction and improve throughput if adoption goes well. McDonald’s pilots AI system at select US drive-thru locations
• Positive Sentiment: The company’s FIFA World Cup meal promotions, collectible cups, toys, and other limited-time items could support customer traffic and sales momentum. McDonald’s just announced special World Cup meals only available for a limited time
• Positive Sentiment: Analysts and commentators continue to frame McDonald’s as a resilient long-term holding, citing its franchise model, dividends, and defensive qualities. McDonald’s stock could be bottoming, creating a contrarian bet for long-term investors
• Neutral Sentiment: Several articles focused on McDonald’s new strategic direction and beverage innovation, highlighting possible growth opportunities but without a clear near-term earnings impact. McDonald’s outlines new strategic course
• Negative Sentiment: Fresh workplace-incident reports and culture concerns may create some investor caution around operational oversight and brand reputation. McDonald’s Workplace Incidents Put Culture Risks And Investor Focus In Spotlight

Insider Activity at McDonald's

In other McDonald's news, EVP Desiree Ralls-Morrison sold 2,763 shares of the firm's stock in a transaction that occurred on Thursday, May 28th. The stock was sold at an average price of $278.36, for a total transaction of $769,108.68. Following the completion of the transaction, the executive vice president owned 6,268 shares in the company, valued at $1,744,760.48. This trade represents a 30.59% decrease in their position. The transaction was disclosed in a filing with the SEC, which is available through this link. Also, insider Joseph M. Erlinger sold 2,626 shares of the firm's stock in a transaction that occurred on Friday, April 10th. The shares were sold at an average price of $307.00, for a total value of $806,182.00. Following the transaction, the insider owned 8,400 shares of the company's stock, valued at $2,578,800. This represents a 23.82% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 6,055 shares of company stock valued at $1,769,373 in the last 90 days. 0.26% of the stock is currently owned by company insiders.

Hedge Funds Weigh In On McDonald's

Several institutional investors have recently added to or reduced their stakes in the company. Vanguard Group Inc. boosted its holdings in shares of McDonald's by 1.0% in the 4th quarter. Vanguard Group Inc. now owns 72,351,127 shares of the fast-food giant's stock worth $22,112,675,000 after purchasing an additional 703,458 shares during the period. State Street Corp increased its position in shares of McDonald's by 2.7% during the 4th quarter. State Street Corp now owns 35,983,997 shares of the fast-food giant's stock valued at $10,997,789,000 after purchasing an additional 959,140 shares during the last quarter. Geode Capital Management LLC increased its position in shares of McDonald's by 0.4% during the 4th quarter. Geode Capital Management LLC now owns 17,038,519 shares of the fast-food giant's stock valued at $5,195,965,000 after purchasing an additional 76,090 shares during the last quarter. Price T Rowe Associates Inc. MD increased its position in shares of McDonald's by 3.0% during the 4th quarter. Price T Rowe Associates Inc. MD now owns 9,474,749 shares of the fast-food giant's stock valued at $2,895,768,000 after purchasing an additional 277,617 shares during the last quarter. Finally, Norges Bank bought a new position in shares of McDonald's during the 4th quarter valued at approximately $2,890,438,000. Hedge funds and other institutional investors own 70.29% of the company's stock.

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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