McDonald's (NYSE:MCD) Price Target Lowered to $319.00 at Morgan Stanley

Key Points

• Morgan Stanley lowered McDonald’s price target to $319 from $322 while maintaining an “equal weight” rating, implying approximately 18.9% upside from the reported share price.
• Analyst sentiment remains broadly positive, with a “Moderate Buy” consensus and average target of $329.44 based on 16 Buy and 12 Hold ratings.
• McDonald’s exceeded quarterly EPS expectations at $3.38 versus $3.32, while revenue increased 3.7% to $7.10 billion. However, U.S. comparable sales grew just 0.8%, highlighting pressure on domestic traffic and the need to simplify its value strategy.

McDonald's (NYSE:MCD - Get Free Report) had its price objective dropped by equities researchers at Morgan Stanley from $322.00 to $319.00 in a research note issued on Wednesday. The brokerage presently has an "equal weight" rating on the fast-food giant's stock. Morgan Stanley's target price would indicate a potential upside of 18.88% from the company's current price.

MCD has been the subject of a number of other research reports. Citigroup dropped their price target on shares of McDonald's from $375.00 to $335.00 and set a "buy" rating for the company in a research note on Wednesday, July 15th. Robert W. Baird set a $305.00 price objective on shares of McDonald's in a research note on Thursday, May 7th. Deutsche Bank Aktiengesellschaft reissued a "buy" rating and set a $345.00 price objective (up from $335.00) on shares of McDonald's in a report on Wednesday. TD Cowen restated a "hold" rating on shares of McDonald's in a research note on Tuesday. Finally, Cfra raised shares of McDonald's to a "buy" rating in a research report on Friday, May 8th. Sixteen investment analysts have rated the stock with a Buy rating and twelve have assigned a Hold rating to the stock. Based on data from MarketBeat.com, the company currently has a consensus rating of "Moderate Buy" and an average target price of $329.44.

McDonald's Stock Performance

Shares of NYSE MCD opened at $268.35 on Wednesday. McDonald's has a 1 year low of $260.96 and a 1 year high of $341.75. The stock's 50-day simple moving average is $274.32 and its 200-day simple moving average is $297.05. The firm has a market cap of $190.66 billion, a price-to-earnings ratio of 22.12, a PEG ratio of 2.85 and a beta of 0.41.

McDonald's (NYSE:MCD - Get Free Report) last issued its quarterly earnings data 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. McDonald's had a negative return on equity of 442.10% and a net margin of 31.62%.The firm had revenue of $7.10 billion during the quarter, compared to analyst estimates of $7.13 billion. During the same quarter last year, the firm earned $3.19 EPS. McDonald's's quarterly revenue was up 3.7% on a year-over-year basis. As a group, research analysts predict that McDonald's will post 12.85 EPS for the current year.

Insider Activity at McDonald's

In related news, EVP Desiree Ralls-Morrison sold 2,763 shares of the business'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. The trade was a 30.59% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available through this hyperlink. Also, insider Joseph M. Erlinger sold 5,252 shares of the company's stock in a transaction on Wednesday, June 10th. The stock was sold at an average price of $284.32, for a total value of $1,493,248.64. Following the transaction, the insider owned 7,734 shares of the company's stock, valued at approximately $2,198,930.88. The trade was a 40.44% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold 8,348 shares of company stock valued at $2,355,634 over the last ninety days. Corporate insiders own 0.26% of the company's stock.

Hedge Funds Weigh In On McDonald's

Several hedge funds and other institutional investors have recently modified their holdings of the company. Your Advocates Ltd. LLP bought a new position in McDonald's in the 4th quarter worth about $27,000. IFC & Insurance Marketing Inc. bought a new stake in shares of McDonald's during the fourth quarter valued at approximately $29,000. Abound Financial LLC acquired a new position in shares of McDonald's during the fourth quarter worth approximately $30,000. Purpose Unlimited Inc. bought a new position in McDonald's in the 4th quarter worth approximately $31,000. Finally, DecisionPoint Financial LLC increased its position in McDonald's by 1,616.7% in the 4th quarter. DecisionPoint Financial LLC now owns 103 shares of the fast-food giant's stock valued at $31,000 after acquiring an additional 97 shares during the period. Institutional investors and hedge funds own 70.29% of the company's stock.

Key Headlines Impacting McDonald's

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

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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