McDonald's (NYSE:MCD) Sets New 52-Week Low - Time to Sell?

Key Points

• McDonald’s hit a new 52-week low, with shares falling to as low as $271.07 and trading near $270.90, reflecting renewed investor concern about the stock’s recent weakness and growth outlook.
• The company has a mix of positive and negative business catalysts: its new “NEXT” strategy is aimed at improving growth and restaurant productivity, but it also scrapped the “Wrap of the Day” promotion, which could hurt customer traffic sentiment.
• Despite the slide, analysts remain broadly constructive, with McDonald’s holding a Moderate Buy consensus and an average price target of $336.26, while the company continues to pay a 2.7% dividend yield.

McDonald's Corporation (NYSE:MCD - Get Free Report) reached a new 52-week low on Monday . The stock traded as low as $271.07 and last traded at $270.8980, with a volume of 2175805 shares. The stock had previously closed at $278.61.

Key Stories Impacting McDonald's

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

• Positive Sentiment: McDonald’s launched its new “NEXT” strategy, aimed at improving growth and restaurant productivity, which could help support margins and long-term performance. How McDonald’s (MCD) Is Using Its NEXT Strategy to Protect Growth and Restaurant Productivity
• Positive Sentiment: McDonald’s is also getting some brand support from consumer-interest stories, including the return of an iconic McFlurry after 17 years, which may help drive short-term customer excitement. McDonald's brings back iconic McFlurry for first time in 17 years
• Neutral Sentiment: Several recent articles focused on McDonald’s menu items, hacks, and nostalgia-driven content, which may help keep the brand in the spotlight but are unlikely to materially move the stock on their own.
• Neutral Sentiment: A story noting that Kevin O’Leary’s ETF counts McDonald’s among its top picks reinforces the company’s defensive, dividend-oriented appeal to income investors. How McDonald’s (MCD) Is Using Its NEXT Strategy to Protect Growth and Restaurant Productivity
• Negative Sentiment: Investor attention is still centered on weakness in the stock, with one recent article highlighting that MCD has fallen this year and is trading near its yearly low, signaling concern about growth expectations. What's Wrong With McDonald's Stock?
• Negative Sentiment: McDonald’s decision to scrap its popular “Wrap of the Day” promotion after 15 years could weigh on sentiment if customers view it as a value or traffic headwind. McDonald’s is scrapping its popular wrap of the day deal after 15 years

Analyst Upgrades and Downgrades

A number of analysts have recently issued reports on the company. Sanford C. Bernstein restated a "market perform" rating on shares of McDonald's in a report on Monday. JPMorgan Chase & Co. lowered their price target on McDonald's from $325.00 to $305.00 and set an "overweight" rating on the stock in a report on Monday, May 11th. Evercore set a $350.00 price target on McDonald's in a research report on Friday, May 8th. Barclays reduced their price objective 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. Finally, Morgan Stanley set a $331.00 price objective on McDonald's in a research report on Friday, May 8th. Sixteen investment analysts have rated the stock with a Buy rating, thirteen have assigned a Hold rating and one has given a Sell rating to the company's stock. According to data from MarketBeat.com, McDonald's presently has an average rating of "Moderate Buy" and a consensus price target of $336.26.

McDonald's Trading Down 2.7%

The firm has a market capitalization of $192.54 billion, a PE ratio of 22.37, a PEG ratio of 2.78 and a beta of 0.41. The firm's fifty day moving average price is $286.98 and its 200 day moving average price is $305.82.

McDonald's (NYSE:MCD - Get Free Report) last announced 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 business had revenue of $6.52 billion during the quarter, compared to analyst estimates 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 quarterly revenue was up 9.4% compared to the same quarter last year. During the same period last year, the company earned $2.67 earnings per share. As a group, research analysts expect that McDonald's Corporation will post 12.93 EPS for the current year.

McDonald's Dividend Announcement

The company also recently declared a quarterly dividend, which was paid on Tuesday, June 16th. Stockholders of record on Tuesday, June 2nd were paid a dividend of $1.86 per share. The ex-dividend date of this dividend was Tuesday, June 2nd. This represents a $7.44 dividend on an annualized basis and a dividend yield of 2.7%. McDonald's's dividend payout ratio (DPR) is 61.34%.

Insider Activity

In related news, EVP Desiree Ralls-Morrison sold 2,763 shares of the stock in a transaction that occurred on Thursday, May 28th. The stock was sold at an average price of $278.36, for a total value of $769,108.68. Following the transaction, the executive vice president owned 6,268 shares in the company, valued at approximately $1,744,760.48. This represents a 30.59% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is accessible through this link. Also, insider Joseph M. Erlinger sold 5,252 shares of the firm'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 transaction of $1,493,248.64. Following the transaction, 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 position. The disclosure for this sale is available in the SEC filing. Over the last quarter, insiders have sold 11,307 shares of company stock valued at $3,262,622. 0.26% of the stock is owned by corporate insiders.

Institutional Investors Weigh In On McDonald's

Several institutional investors and hedge funds have recently modified their holdings of the business. Your Advocates Ltd. LLP bought a new stake in shares of McDonald's during the 4th quarter worth about $27,000. Park Place Capital Corp raised its stake in shares of McDonald's by 95.7% in the 4th quarter. Park Place Capital Corp now owns 92 shares of the fast-food giant's stock valued at $28,000 after acquiring an additional 45 shares in the last quarter. IFC & Insurance Marketing Inc. bought a new position in shares of McDonald's in the 4th quarter valued at approximately $29,000. Abound Financial LLC acquired a new stake in McDonald's in the 4th quarter worth approximately $30,000. Finally, DecisionPoint Financial LLC lifted its holdings 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 worth $31,000 after purchasing an additional 97 shares during the last quarter. Institutional investors and hedge funds own 70.29% of the company's stock.

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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