McDonald's (NYSE:MCD) Sets New 12-Month Low on Analyst Downgrade

Key Points

• McDonald’s shares hit a new 52-week low after Citigroup cut its price target from $375 to $335, even though the bank kept a buy rating. The stock fell as low as $264.09 amid the downgrade-driven pressure.
• Analyst sentiment remains mixed: McDonald’s has 15 Buy ratings and 13 Hold ratings, with a consensus Moderate Buy and an average price target of $336.35. Other firms have also trimmed targets or maintained cautious stances.
• The company recently posted solid quarterly results, with EPS of $2.83 beating estimates and revenue rising 9.4% year over year to $6.52 billion. McDonald’s also paid a quarterly dividend of $1.86 per share, implying a 2.8% annualized yield.

McDonald's Corporation (NYSE:MCD - Get Free Report) hit a new 52-week low on Wednesday after Citigroup lowered their price target on the stock from $375.00 to $335.00. Citigroup currently has a buy rating on the stock. McDonald's traded as low as $264.09 and last traded at $264.8750, with a volume of 3660290 shares. The stock had previously closed at $268.94.

Other equities research analysts also recently issued reports about the stock. Royal Bank Of Canada reissued a "sector perform" rating on shares of McDonald's in a research report on Tuesday, June 23rd. Barclays cut their price target on McDonald's from $380.00 to $350.00 and set an "overweight" rating for the company in a research note on Friday, May 8th. Sanford C. Bernstein reissued a "market perform" rating on shares of McDonald's in a research note on Monday, June 22nd. TD Cowen reaffirmed a "hold" rating on shares of McDonald's in a research report on Friday, June 12th. Finally, Robert W. Baird set a $305.00 price target on McDonald's in a report on Thursday, May 7th. Fifteen equities research analysts have rated the stock with a Buy rating and thirteen have assigned a Hold rating to the company's stock. According to MarketBeat.com, the stock has an average rating of "Moderate Buy" and an average price target of $336.35.

Insider Transactions at McDonald's

In other McDonald's news, insider Joseph M. Erlinger sold 5,252 shares of the company's stock in a transaction dated 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 of the company's stock, valued at approximately $2,198,930.88. This represents a 40.44% decrease in their position. The sale was disclosed in a document filed with the SEC, which is accessible through the SEC website. Also, EVP Desiree Ralls-Morrison sold 2,763 shares of the stock in a transaction dated Thursday, May 28th. The shares were sold at an average price of $278.36, for a total transaction 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 position. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 8,681 shares of company stock valued at $2,456,440 over the last ninety days. 0.26% of the stock is currently owned by insiders.

Key McDonald's News

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

• Positive Sentiment: McDonald’s is rolling out several limited-time menu items, including new chicken options and a Caesar sauce, which could help drive traffic and boost sales. McDonald's Adding New Chicken Items, Caesar Sauce To Menu
• Positive Sentiment: The company’s BT21 Happy Meal promotion is generating buzz and likely supporting near-term marketing momentum and family traffic. How Long Will the BT21 Happy Meal Be Available at McDonald’s?
• Positive Sentiment: Some market commentary says MCD looks more attractive on valuation than certain restaurant peers, which may help support the bull case. MCD at $268, Starbucks at $106: Buy, Sell or Hold?
• Neutral Sentiment: Restaurant-sector performance remains mixed overall, with stronger operators outperforming, suggesting investors are being selective across the group. Restaurant Sector Remains Mixed as Stronger Operators Outperform, Morgan Stanley Says
• Negative Sentiment: Citigroup lowered its price target on McDonald’s from $375 to $335, which can weigh on sentiment even though it kept a buy rating. Citigroup price target cut news

Institutional Trading of McDonald's

Hedge funds have recently bought and sold shares of the business. Your Advocates Ltd. LLP bought a new position in McDonald's during the fourth quarter valued at about $27,000. Park Place Capital Corp raised its position in McDonald's by 95.7% in the fourth quarter. Park Place Capital Corp now owns 92 shares of the fast-food giant's stock worth $28,000 after acquiring an additional 45 shares during the period. IFC & Insurance Marketing Inc. bought a new stake in McDonald's in the fourth quarter worth about $29,000. Abound Financial LLC purchased a new position in McDonald's in the fourth quarter valued at about $30,000. Finally, Purpose Unlimited Inc. purchased a new position in McDonald's in the fourth quarter valued at about $31,000. 70.29% of the stock is currently owned by institutional investors.

McDonald's Trading Down 1.5%

The stock's 50-day moving average price is $277.82 and its two-hundred day moving average price is $301.17. The stock has a market capitalization of $188.20 billion, a P/E ratio of 21.84, a P/E/G ratio of 2.83 and a beta of 0.41.

McDonald's (NYSE:MCD - Get Free Report) last issued its quarterly 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 net margin of 31.62% and a negative return on equity of 442.10%. The company had revenue of $6.52 billion during the quarter, compared to analyst estimates of $6.47 billion. During the same quarter last year, the business posted $2.67 EPS. McDonald's's quarterly revenue was up 9.4% compared to the same quarter last year. On average, equities research analysts predict that McDonald's Corporation will post 12.9 earnings per share for the current year.

McDonald's Announces Dividend

The company also recently announced a quarterly dividend, which was paid on Tuesday, June 16th. Shareholders of record on Tuesday, June 2nd were given a $1.86 dividend. This represents a $7.44 dividend on an annualized basis and a yield of 2.8%. The ex-dividend date of this dividend was Tuesday, June 2nd. McDonald's's dividend payout ratio (DPR) is currently 61.34%.

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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