McDonald's (NYSE:MCD) Reaches New 12-Month Low After Analyst Downgrade

Key Points

• McDonald's shares hit a new 52-week low after Royal Bank of Canada cut its price target from $330 to $305 and kept a sector perform rating. The stock traded as low as $273.52 during the session.
• Analyst sentiment remains mixed, with several firms still positive on the stock, but recent target cuts and a consensus average target of $335.14 suggest caution. Overall, Wall Street still labels McDonald's a Moderate Buy.
• Recent fundamentals were solid: McDonald's beat Q1 earnings and revenue estimates, with comparable sales up 3.8% and revenue rising 9.4% year over year. However, investors remain focused on whether value-menu efforts can offset weakening consumer spending.

McDonald's Corporation (NYSE:MCD - Get Free Report) shares hit a new 52-week low during mid-day trading on Monday after Royal Bank Of Canada lowered their price target on the stock from $330.00 to $305.00. Royal Bank Of Canada currently has a sector perform rating on the stock. McDonald's traded as low as $273.52 and last traded at $275.5490, with a volume of 545193 shares traded. The stock had previously closed at $275.75.

A number of other research analysts also recently issued reports on the stock. JPMorgan Chase & Co. lifted their price target on shares of McDonald's from $305.00 to $325.00 and gave the stock an "overweight" rating in a research note on Tuesday, February 24th. TD Cowen lowered their price target on McDonald's from $330.00 to $300.00 and set a "hold" rating for the company in a report on Thursday. BTIG Research reaffirmed a "buy" rating and issued a $370.00 price target on shares of McDonald's in a report on Thursday. Evercore set a $350.00 price target on McDonald's in a report on Friday. Finally, Robert W. Baird set a $305.00 price target on McDonald's in a report on Thursday. Seventeen investment analysts have rated the stock with a Buy rating, fourteen have assigned a Hold rating and one has issued a Sell rating to the stock. According to data from MarketBeat.com, McDonald's has a consensus rating of "Moderate Buy" and an average target price of $335.14.

Insider Transactions at McDonald's

In other news, CMO Edith Morgan Flatley sold 4,692 shares of the stock in a transaction that occurred on Thursday, February 12th. The stock was sold at an average price of $331.00, for a total value of $1,553,052.00. Following the completion of the sale, the chief marketing officer directly owned 6,200 shares of the company's stock, valued at approximately $2,052,200. This represents a 43.08% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. Also, insider Joseph M. Erlinger sold 333 shares of the stock in a transaction on Thursday, April 23rd. The stock was sold at an average price of $302.72, for a total value of $100,805.76. Following the sale, the insider directly owned 8,067 shares of the company's stock, valued at approximately $2,442,042.24. This represents a 3.96% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders sold a total of 71,990 shares of company stock valued at $23,824,113 over the last ninety days. 0.26% of the stock is owned by insiders.

Key Stories Impacting McDonald's

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

• Positive Sentiment: McDonald's reported stronger-than-expected Q1 performance, with comparable store sales up 3.8% and support from newer menu items like the Big Arch burger, reinforcing that the brand can still drive traffic. McDonald’s Stock Looks Tasty Here as Investors Gobble Up Value
• Positive Sentiment: Some commentary argues the recent stock drop may be overdone, with the view that McDonald's remains an attractive dividend-growth story and a potential buy on weakness. The More McDonald's Drops, The More I Want To Buy This Dividend Growth Machine
• Neutral Sentiment: McDonald's is pushing value offerings to support sales, but management said higher gas prices could hurt demand among lower-income consumers, keeping investors focused on traffic resilience. McDonald's focus on value lifts sales, but says gas prices could dent demand
• Neutral Sentiment: The company is continuing store modernization, including phasing out self-serve soda machines, which is part of a longer-term operational update rather than a near-term earnings driver. McDonald's modernization: Phasing out self-serve soda machines
• Negative Sentiment: TD Cowen cut its price target on McDonald's to $300, adding to concerns that the stock may face more downside if consumer spending weakens. TD Cowen Cuts McDonald's NYSE: MCD Price Target to $300.00
• Negative Sentiment: CEO commentary warning about a consumer spending pullback, along with backlash over the McValue menu, suggests affordability pressure could make it harder for McDonald's to sustain momentum. McDonald’s CEO sounds warning on consumer spending pullback McDonald's faces backlash over McValue menu as Americans reminisce about 99-cent burgers

Institutional Investors Weigh In On McDonald's

Hedge funds have recently modified their holdings of the stock. Norges Bank purchased a new position in McDonald's in the fourth quarter worth $2,890,438,000. Diamant Asset Management Inc. raised its position in McDonald's by 30,979.0% in the first quarter. Diamant Asset Management Inc. now owns 2,596,340 shares of the fast-food giant's stock worth $806,917,000 after acquiring an additional 2,587,986 shares in the last quarter. J. Stern & Co. LLP raised its position in McDonald's by 9,867.5% in the fourth 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 raised its position 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 worth $913,157,000 after acquiring an additional 1,974,998 shares in the last quarter. Finally, Franklin Resources Inc. raised its position in McDonald's by 36.6% in the third quarter. Franklin Resources Inc. now owns 4,396,837 shares of the fast-food giant's stock worth $1,336,155,000 after acquiring an additional 1,179,244 shares in the last quarter. 70.29% of the stock is owned by institutional investors and hedge funds.

McDonald's Price Performance

The company has a 50-day simple moving average of $311.40 and a 200-day simple moving average of $311.40. The stock has a market cap of $195.03 billion, a PE ratio of 22.63, a PEG ratio of 2.58 and a beta of 0.43.

McDonald's (NYSE:MCD - Get Free Report) last released its quarterly earnings data 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. The firm had revenue of $6.52 billion during the quarter, compared to analysts' expectations of $6.47 billion. McDonald's had a negative return on equity of 442.10% and a net margin of 31.62%.McDonald's's revenue was up 9.4% compared to the same quarter last year. During the same quarter in the prior year, the business posted $2.67 earnings per share. On average, equities analysts expect that McDonald's Corporation will post 13.04 EPS for the current fiscal year.

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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