McDonald's (NYSE:MCD) Stock Jumps 1.6% - Here's What Happened

Key Points

• McDonald’s shares rose 1.6% to about $246.47 on above-average trading volume, despite remaining below their 50-day and 200-day moving averages.
• The stock’s valuation has become more attractive after its decline, while analysts see potential upside from the NEXT growth plan, renewed value offerings and the company’s global franchise strategy. MarketBeat rates the shares a “Moderate Buy” with a consensus target of $295.64.
• Investor concerns include weaker spending among lower-income customers, possible limits to further price increases and uncertainty ahead of third-quarter earnings. McDonald’s also raised its quarterly dividend to $1.93 per share, implying a 3.1% annual yield.

McDonald's Corporation (NYSE:MCD - Get Free Report) was up 1.6% during trading on Tuesday. The company traded as high as $247.29 and last traded at $246.4710. 5,429,495 shares changed hands during mid-day trading, an increase of 27% from the average session volume of 4,272,530 shares. The stock had previously closed at $242.67.

More McDonald's News

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

• Positive Sentiment: McDonald’s valuation has become more attractive after its recent decline. Trefis notes that the shares trade at roughly 19.6–19.7 times trailing earnings, below the company’s three-year average and at one of the lowest quarter-end multiples in a decade. A partial recovery in the earnings multiple could provide upside if growth improves. Is the Market Underpricing McDonald’s Stock?
• Positive Sentiment: Analysts remain constructive on McDonald’s longer-term strategy. UBS believes the NEXT growth plan and renewed value offerings could outweigh near-term U.S. weakness and help the company gain global market share in 2027. McDonald’s NEXT Plan and Value Push
• Positive Sentiment: Several articles highlight McDonald’s dependable franchise model, elevated dividend yield and long record of dividend increases. That income appeal may support demand for the stock, particularly while its valuation remains depressed. Reasons to Own McDonald’s Stock
• Neutral Sentiment: New products, Disney-themed Happy Meal promotions and Halloween Boo Buckets could support traffic and customer engagement, but the coverage provides no evidence yet of a material sales or earnings impact. McDonald’s New Chicken Product
• Negative Sentiment: Morgan Stanley flagged a pricing-power problem as lower-income customers reduce spending, raising concerns about comparable-sales growth, margins and the effectiveness of further price increases. McDonald’s Pricing-Power Problem
• Negative Sentiment: Investors are also looking ahead to third-quarter earnings, while reports of alleged menu-pricing practices and a reduced position by Cordatus Wealth Management add smaller sources of uncertainty. Alleged Menu Pricing Scheme

Wall Street Analyst Weigh In

A number of equities research analysts recently weighed in on MCD shares. Bank of America lifted their price objective on shares of McDonald's from $339.00 to $343.00 in a report on Wednesday, August 5th. Oppenheimer lowered their price objective on shares of McDonald's from $325.00 to $295.00 and set an "outperform" rating for the company in a research report on Thursday, September 24th. Piper Sandler set a $286.00 target price on shares of McDonald's in a research note on Tuesday, August 4th. Melius Research reduced their target price on shares of McDonald's from $250.00 to $230.00 and set a "sell" rating on the stock in a research report on Monday, September 28th. Finally, Jefferies Financial Group decreased their price target on shares of McDonald's from $260.00 to $250.00 and set an "overweight" rating for the company in a research note on Tuesday, September 29th. One research analyst has rated the stock with a Strong Buy rating, twenty-two have assigned a Buy rating, thirteen have issued a Hold rating and one has given a Sell rating to the company. According to data from MarketBeat, the company has a consensus rating of "Moderate Buy" and a consensus price target of $295.64.

McDonald's Price Performance

The firm has a market capitalization of $174.41 billion, a P/E ratio of 20.02, a P/E/G ratio of 2.72 and a beta of 0.44. The stock's fifty day simple moving average is $251.44 and its 200 day simple moving average is $271.35.

McDonald's (NYSE:MCD - Get Free Report) last released its quarterly earnings results on Tuesday, August 4th. The fast-food giant reported $3.38 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 analyst estimates of $7.13 billion. During the same period in the prior year, the firm posted $3.19 earnings per share. The company's quarterly revenue was up 3.7% on a year-over-year basis. As a group, sell-side analysts forecast that McDonald's Corporation will post 12.84 EPS for the current fiscal year.

McDonald's Increases Dividend

The business also recently declared a quarterly dividend, which will be paid on Tuesday, December 15th. Shareholders of record on Tuesday, December 1st will be paid a dividend of $1.93 per share. This represents a $7.72 dividend on an annualized basis and a yield of 3.1%. The ex-dividend date is Tuesday, December 1st. This is a positive change from McDonald's's previous quarterly dividend of $1.86. McDonald's's dividend payout ratio (DPR) is currently 60.44%.

Institutional Trading of McDonald's

Institutional investors and hedge funds have recently added to or reduced their stakes in the company. Bank Pictet & Cie Europe AG lifted its position in McDonald's by 0.9% during the 3rd quarter. Bank Pictet & Cie Europe AG now owns 98,923 shares of the fast-food giant's stock worth $22,845,000 after acquiring an additional 927 shares during the period. Cypress Capital LLC increased its holdings in shares of McDonald's by 5.5% in the third quarter. Cypress Capital LLC now owns 8,391 shares of the fast-food giant's stock valued at $1,938,000 after purchasing an additional 440 shares during the period. Norway Savings Bank increased its holdings in shares of McDonald's by 18.7% in the third quarter. Norway Savings Bank now owns 4,393 shares of the fast-food giant's stock valued at $1,015,000 after purchasing an additional 691 shares during the period. Net Worth Advisory Group increased its holdings in shares of McDonald's by 31.6% in the third quarter. Net Worth Advisory Group now owns 3,164 shares of the fast-food giant's stock valued at $734,000 after purchasing an additional 759 shares during the period. Finally, Lakeside Advisors INC. raised its stake in shares of McDonald's by 2.2% during the third quarter. Lakeside Advisors INC. now owns 3,873 shares of the fast-food giant's stock worth $894,000 after purchasing an additional 85 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 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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