McDonald's Sees Unusually High Options Volume (NYSE:MCD)

Key Points

• Unusual options activity: Investors bought 32,245 McDonald’s call options, 45% above the average daily volume of 22,241, signaling heightened interest in the stock.
• Mixed outlook ahead of earnings: McDonald’s is preparing to report second-quarter results, while analysts remain cautiously positive with a “Moderate Buy” consensus but recent price-target cuts and concerns about same-store sales and lower-income consumers.
• Shares remain under pressure: MCD traded at $270.83, well below its 200-day moving average of $297.88 and its 52-week high of $341.75, though the company supports income investors with a quarterly dividend of $1.86 per share.

McDonald's Corporation (NYSE:MCD - Get Free Report) was the target of some unusual options trading activity on Friday. Investors bought 32,245 call options on the stock. This represents an increase of 45% compared to the average daily volume of 22,241 call options.

McDonald's News Roundup

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

• Positive Sentiment: McDonald’s declared a quarterly dividend of $1.86 per share, payable September 16 to shareholders of record September 1. The continued dividend supports the stock’s appeal to income-oriented investors. Dividend Strength and Softer Sales Expectations
• Positive Sentiment: Technical analyst Jay Woods said McDonald’s chart is beginning to point toward a potential buy signal, offering a counterpoint to the stock’s prolonged weakness. McDonald’s Charts May Signal a Buy
• Neutral Sentiment: McDonald’s is preparing to report second-quarter results, with investors watching value meals, menu innovation, digital promotions, same-store sales, traffic and profitability. The earnings release is likely to be the main near-term catalyst. Q2 Earnings Factors to Watch
• Neutral Sentiment: Analysts maintain a consensus “Moderate Buy” view, indicating that McDonald’s brand strength and global scale continue to attract long-term support despite recent pressure. Consensus Moderate Buy Rating
• Negative Sentiment: Mizuho lowered its price target from $300 to $290 and assigned a neutral rating. The reduced target reflects more limited expected upside and adds to caution ahead of earnings. Mizuho Lowers McDonald’s Price Target
• Negative Sentiment: Analysts are becoming more cautious about same-store-sales growth, particularly as lower-income consumers face pressure. Reports also highlight the possibility of weaker earnings, while technical data show MCD below its 200-week moving average for its longest stretch since 2003. Erste Group Forecasts Weaker Earnings

Wall Street Analysts Forecast Growth

Several analysts have recently issued reports on the stock. Morgan Stanley dropped their target price on shares of McDonald's from $331.00 to $322.00 and set an "equal weight" rating on the stock in a research report on Wednesday, July 15th. KeyCorp reaffirmed an "overweight" rating on shares of McDonald's in a research note on Wednesday, July 15th. Mizuho lowered their price objective on McDonald's from $300.00 to $290.00 and set a "neutral" rating on the stock in a report on Friday. Evercore set a $320.00 price objective on McDonald's in a research note on Thursday, July 23rd. Finally, Royal Bank Of Canada reissued a "sector perform" rating on shares of McDonald's in a report on Tuesday. Fifteen analysts have rated the stock with a Buy rating and twelve have given a Hold rating to the stock. According to data from MarketBeat, the stock presently has an average rating of "Moderate Buy" and an average price target of $331.92.

McDonald's Price Performance

MCD traded up $2.40 during trading hours on Friday, reaching $270.83. The company's stock had a trading volume of 2,702,889 shares, compared to its average volume of 3,825,945. McDonald's has a fifty-two week low of $260.96 and a fifty-two week high of $341.75. The stock has a market cap of $192.43 billion, a PE ratio of 22.29, a P/E/G ratio of 2.92 and a beta of 0.41. The business's 50-day moving average is $275.11 and its 200-day moving average is $297.88.

McDonald's (NYSE:MCD - Get Free Report) last released its quarterly earnings results on Thursday, May 7th. The fast-food giant reported $2.83 earnings per share for the quarter, topping analysts' consensus estimates of $2.74 by $0.09. The business 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%.The company's revenue was up 9.4% compared to the same quarter last year. During the same period in the prior year, the business posted $2.67 EPS. Analysts expect that McDonald's will post 12.86 EPS for the current year.

McDonald's Announces Dividend

The firm also recently declared a quarterly dividend, which will be paid on Wednesday, September 16th. Shareholders of record on Tuesday, September 1st will be paid a $1.86 dividend. The ex-dividend date is Tuesday, September 1st. This represents a $7.44 annualized dividend and a dividend yield of 2.7%. McDonald's's payout ratio is 61.34%.

Insider Activity at McDonald's

In other McDonald's news, insider Joseph M. Erlinger sold 5,252 shares of McDonald's stock in a transaction 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 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. 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 firm's stock in a transaction dated Thursday, May 28th. The shares were sold at an average price of $278.36, for a total value of $769,108.68. Following the sale, the executive vice president owned 6,268 shares in the company, valued at $1,744,760.48. This trade represents a 30.59% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Over the last 90 days, insiders have sold 8,348 shares of company stock valued at $2,355,634. Company insiders own 0.26% of the company's stock.

Institutional Investors Weigh In On McDonald's

Several large investors have recently bought and sold shares of MCD. Brighton Jones LLC raised its holdings in shares of McDonald's by 21.6% in the 4th quarter. Brighton Jones LLC now owns 9,286 shares of the fast-food giant's stock valued at $2,692,000 after purchasing an additional 1,649 shares in the last quarter. Revolve Wealth Partners LLC raised its position in shares of McDonald's by 2.8% during the 4th quarter. Revolve Wealth Partners LLC now owns 1,942 shares of the fast-food giant's stock worth $563,000 after acquiring an additional 52 shares in the last quarter. Sivia Capital Partners LLC lifted its stake in McDonald's by 11.4% during the second quarter. Sivia Capital Partners LLC now owns 2,017 shares of the fast-food giant's stock worth $589,000 after purchasing an additional 206 shares during the last quarter. United Bank lifted its stake in McDonald's by 6.0% during the second quarter. United Bank now owns 8,102 shares of the fast-food giant's stock worth $2,367,000 after purchasing an additional 459 shares during the last quarter. Finally, Schnieders Capital Management LLC. lifted its position in shares of McDonald's by 2.5% during the 2nd quarter. Schnieders Capital Management LLC. now owns 12,938 shares of the fast-food giant's stock worth $3,780,000 after buying an additional 312 shares during the last quarter. Hedge funds and other institutional investors own 70.29% of the company's stock.

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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