McDonald's (NYSE:MCD) Given New $295.00 Price Target at Royal Bank Of Canada

Key Points

• Royal Bank of Canada cut McDonald’s price target from $305 to $295 while maintaining a “sector perform” rating, implying roughly 9.9% upside. Analysts overall remain moderately bullish, with a consensus target of $329.44.
• McDonald’s quarterly adjusted earnings came in at $3.38 per share, above the $3.32 consensus, while revenue rose 3.7% year over year to $7.10 billion but narrowly missed expectations.
• U.S. comparable sales increased just 0.8% as value-conscious consumers reduced traffic; the company plans to simplify promotions, improve domestic execution under new U.S. president Skye Anderson, and delayed its 50,000-restaurant goal from 2027 to 2028.

McDonald's (NYSE:MCD - Get Free Report) had its price objective cut by Royal Bank Of Canada from $305.00 to $295.00 in a research report issued to clients and investors on Wednesday. The brokerage currently has a "sector perform" rating on the fast-food giant's stock. Royal Bank Of Canada's target price would suggest a potential upside of 9.93% from the company's current price.

A number of other brokerages have also recently commented on MCD. BTIG Research reiterated a "buy" rating and issued a $350.00 price target on shares of McDonald's in a research note on Wednesday. Weiss Ratings cut shares of McDonald's from a "hold (c+)" rating to a "hold (c)" rating in a report on Tuesday, June 23rd. Mizuho cut their target price on shares of McDonald's from $300.00 to $290.00 and set a "neutral" rating for the company in a research note on Friday, July 31st. Deutsche Bank Aktiengesellschaft reiterated a "buy" rating and set a $345.00 price target (up from $335.00) on shares of McDonald's in a report on Wednesday. Finally, Sanford C. Bernstein reissued a "market perform" rating on shares of McDonald's in a research report on Monday, June 22nd. Sixteen investment analysts have rated the stock with a Buy rating and twelve have assigned a Hold rating to the stock. According to MarketBeat, the stock currently has a consensus rating of "Moderate Buy" and a consensus price target of $329.44.

McDonald's Stock Up 1.2%

Shares of McDonald's stock opened at $268.35 on Wednesday. The stock has a market cap of $190.66 billion, a P/E ratio of 22.12, a P/E/G ratio of 2.85 and a beta of 0.41. McDonald's has a 12-month low of $260.96 and a 12-month high of $341.75. The business's 50 day moving average is $274.32 and its 200-day moving average is $297.05.

McDonald's (NYSE:MCD - Get Free Report) last released its 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 during the quarter, compared to analysts' expectations of $7.13 billion. McDonald's had a net margin of 31.62% and a negative return on equity of 442.10%. The firm's revenue was up 3.7% on a year-over-year basis. During the same period last year, the business earned $3.19 earnings per share. On average, sell-side analysts expect that McDonald's will post 12.85 EPS for the current year.

Insider Transactions at McDonald's

In other news, insider Joseph M. Erlinger sold 5,252 shares of McDonald's stock in a transaction that occurred on Wednesday, June 10th. The shares were sold at an average price of $284.32, for a total value of $1,493,248.64. Following the completion of the sale, the insider directly owned 7,734 shares in the company, valued at approximately $2,198,930.88. The trade was a 40.44% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this link. Also, EVP Desiree Ralls-Morrison sold 2,763 shares of the business's stock in a transaction that occurred 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 completion of the sale, the executive vice president owned 6,268 shares of the company's stock, valued at approximately $1,744,760.48. This trade represents a 30.59% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 8,348 shares of company stock valued at $2,355,634 in the last three months. Insiders own 0.26% of the company's stock.

Institutional Trading of McDonald's

Large investors have recently modified their holdings of the stock. Norges Bank bought a new stake in McDonald's during the fourth quarter worth about $2,890,438,000. Diamant Asset Management Inc. raised its position in shares of McDonald's by 30,979.0% in the 1st quarter. Diamant Asset Management Inc. now owns 2,596,340 shares of the fast-food giant's stock valued at $806,917,000 after buying an additional 2,587,986 shares in the last quarter. J. Stern & Co. LLP boosted its position in shares of McDonald's by 9,867.5% during the 4th quarter. J. Stern & Co. LLP now owns 2,541,008 shares of the fast-food giant's stock worth $776,608,000 after acquiring an additional 2,515,515 shares in the last quarter. Viking Global Investors LP increased its stake in McDonald's by 171.7% in 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 acquiring an additional 1,974,998 shares during the last quarter. Finally, Arrowstreet Capital Limited Partnership lifted its stake in McDonald's by 49.9% during the fourth quarter. Arrowstreet Capital Limited Partnership now owns 3,104,337 shares of the fast-food giant's stock worth $948,779,000 after purchasing an additional 1,033,041 shares during the last quarter. 70.29% of the stock is owned by institutional investors and hedge funds.

McDonald's News Summary

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

• Positive Sentiment: McDonald’s reported adjusted earnings of $3.38 per share, ahead of the $3.32 analyst consensus and up from $3.19 a year earlier. Revenue rose 3.7% to $7.10 billion, while stronger franchised margins and record restaurant margins supported profits despite revenue coming in slightly below expectations. McDonald's Q2 Earnings Surpass Estimates
• Positive Sentiment: Comparable sales increased across all three operating segments, with international markets providing important support as the U.S. business slowed. Management said the company sees an opportunity to improve value, service and food quality in the domestic market. McDonald’s posts strong second quarter profit
• Neutral Sentiment: McDonald’s appointed longtime executive Skye Anderson as president of McDonald’s USA, replacing Joe Erlinger. Anderson will oversee nearly 14,000 U.S. restaurants and is tasked with restoring traffic and improving execution; the change offers a potential turnaround catalyst but also highlights the urgency of the domestic slowdown. McDonald’s names Skye Anderson as U.S. president
• Negative Sentiment: U.S. comparable sales rose only 0.8%, down from 2.5% a year earlier and below expectations. Traffic weakened as lower-income consumers remained under pressure from elevated prices and gas costs. McDonald’s US sales disappoint
• Negative Sentiment: The company acknowledged that its value strategy became overly complicated: too many simultaneous promotions and reduced digital deal activity confused customers and employees, failing to bring back enough loyal diners. McDonald’s also delayed its goal of reaching 50,000 global restaurants from 2027 to 2028, signaling a more cautious growth outlook. McDonald’s admits its value meals have become too confusing

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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