McDonald's (NYSE:MCD) Sets New 52-Week Low - What's Next?

Key Points

• McDonald’s shares fell to a new 52-week low of $250.18, trading below both its 50-day and 200-day moving averages. The stock is down despite a quarterly earnings beat, with revenue rising 3.7% year over year but slightly missing estimates.
• Analysts remain broadly constructive, with the stock carrying a “Moderate Buy” consensus rating and an average price target of $317.91. However, several firms recently lowered targets, underscoring concerns about the pace of sales recovery.
• The company’s recovery strategy includes an upcoming investor day and expanded digital delivery efforts, but discounting and elevated diesel costs could pressure restaurant margins and franchisee profitability.

McDonald's Corporation (NYSE:MCD - Get Free Report) hit a new 52-week low on Wednesday . The company traded as low as $250.18 and last traded at $249.3360, with a volume of 785040 shares. The stock had previously closed at $252.78.

McDonald's News Roundup

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

• Positive Sentiment: BTIG reaffirmed its “buy” rating and maintained a $350 price target, implying substantial upside from the current trading level. The call suggests the firm expects McDonald’s brand strength and recovery initiatives to support a rebound.
• Positive Sentiment: McDonald’s is preparing for its September 23 investor day, where it may provide new financial targets through 2030 and more detail on its recovery strategy. Investors are looking for evidence that the company can reignite traffic and sales. McDonald’s likely to issue new financial targets through 2030
• Positive Sentiment: The company’s delivery platform generates more than $20 billion in systemwide sales across approximately 90% of restaurants. Its plan to route 30% of delivery sales through the McDonald’s app by 2027 could improve customer engagement, data collection and digital economics. McDonald’s delivery push and app strategy
• Neutral Sentiment: Jefferies retained its positive stance but reduced its price target to $325 from $350, highlighting that management still must convince investors a sales recovery is achievable. McDonald’s target falls to $325
• Negative Sentiment: Discounting, including an $8 Big Mac meal promotion, may help restore traffic but risks pressuring restaurant-level margins. Record diesel costs could further raise distribution and franchisee expenses, creating a headwind for profitability. McDonald’s pitches $8 Big Macs amid high diesel costs

Analyst Ratings Changes

A number of brokerages have commented on MCD. Sanford C. Bernstein reaffirmed a "market perform" rating and set a $295.00 price target on shares of McDonald's in a research report on Wednesday, August 5th. BTIG Research reissued a "buy" rating and issued a $350.00 price objective on shares of McDonald's in a research note on Wednesday. TD Cowen cut their target price on McDonald's from $300.00 to $282.00 and set a "hold" rating on the stock in a research report on Friday, September 11th. Morgan Stanley decreased their target price on McDonald's from $319.00 to $308.00 and set an "equal weight" rating for the company in a research note on Monday. Finally, Seaport Research Partners started coverage on McDonald's in a report on Wednesday. They issued a "neutral" rating for the company. One equities research analyst has rated the stock with a Strong Buy rating, fifteen have assigned a Buy rating and eleven have assigned a Hold rating to the company. According to MarketBeat.com, the stock presently has an average rating of "Moderate Buy" and an average target price of $317.91.

McDonald's Stock Down 1.4%

The business has a 50-day moving average price of $266.66 and a two-hundred day moving average price of $285.37. The company has a market capitalization of $176.35 billion, a price-to-earnings ratio of 20.22, a price-to-earnings-growth ratio of 2.78 and a beta of 0.41.

McDonald's (NYSE:MCD - Get Free Report) last posted its quarterly earnings results on Tuesday, August 4th. The fast-food giant reported $3.38 earnings per share (EPS) for the quarter, beating the consensus estimate of $3.32 by $0.06. McDonald's had a net margin of 31.72% and a negative return on equity of 572.06%. The business had revenue of $7.10 billion during the quarter, compared to the consensus estimate of $7.13 billion. During the same quarter last year, the firm posted $3.19 EPS. McDonald's's revenue was up 3.7% compared to the same quarter last year. On average, sell-side analysts anticipate that McDonald's Corporation will post 12.88 EPS for the current fiscal year.

McDonald's Dividend Announcement

The firm also recently announced a quarterly dividend, which will be paid on Wednesday, September 16th. Investors of record on Tuesday, September 1st will be issued a $1.86 dividend. This represents a $7.44 dividend on an annualized basis and a dividend yield of 3.0%. The ex-dividend date is Tuesday, September 1st. McDonald's's dividend payout ratio is currently 60.44%.

Hedge Funds Weigh In On McDonald's

Hedge funds have recently added to or reduced their stakes in the stock. Abound Financial LLC purchased a new stake in shares of McDonald's in the 4th quarter valued at approximately $30,000. Purpose Unlimited Inc. acquired a new position in McDonald's in the fourth quarter valued at approximately $31,000. Entrust Financial LLC purchased a new position in McDonald's in the fourth quarter worth approximately $31,000. GKV Capital Management Co. Inc. acquired a new stake in McDonald's during the first quarter worth $33,000. Finally, Merkkuri Wealth Advisors LLC acquired a new stake in McDonald's during the first quarter worth $43,000. Institutional investors and hedge funds own 70.29% of the company's stock.

McDonald's Company Profile

McDonald's Corporation is a global quick-service restaurant company that operates and franchises restaurants under the McDonald's brand. Its restaurants serve a menu that includes hamburgers, cheeseburgers, chicken sandwiches, French fries, breakfast items, desserts, salads, beverages and coffee. Offerings vary by market, and many locations provide drive-thru service, delivery and digital ordering through the McDonald's mobile app.

The company operates through a heavily franchised business model, with restaurants owned and operated by independent franchisees, affiliates and the company itself.

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