McDonald’s Insiders Sell Shares! Investors Should Do the Opposite

Key Points

• McDonald's struggled with headwinds in Q1, but its resilient business model produced sufficient cash flow to sustain capital returns.
• The share count is falling at a low single-digit pace, and capital return includes a dividend and an outlook for distribution growth. 
• Analysts may cap gains or cause a correction in late Q2, but the long-term trend is still positive.

McDonald’s NYSE: MCD insiders are selling shares of this in 2025, but investors should do the opposite. The Insider selling is inconsequential despite its broad nature due to the company’s use of share-based compensation and insider selling trends. MCD insiders, including numerous EVPs, presidents, the CMO, the CEO, and directors, have sold shares in small, regularly spaced amounts over the past two to three years as they take money earned off the table. 

MarketBeat tracks insider sales in 2025, which amount to about $9.2 million. This is a drop in the bucket compared to the $2.8 billion in share repurchases in 2024 and the outlook for buybacks in 2025. 

McDonald’s share buybacks are significant. The company reduced its count by an average of 1.4% in 2024 and is on track to hit the same target in 2025. The Q1 release shows shares are down 1% YOY, with the company’s strongest selling and earnings seasons still ahead. Dividends are also part of the capital return.

McDonald’s dividend is a safe and reliable 2.2%, expected to grow at a mid-single-digit pace for the foreseeable future. 

McDonald’s Struggled With Headwinds and Tough Comps in Q1: Capital Return is Safe

McDonald’s Q1 results reflect the impact of headwinds, the tough comparison to last year’s Leap Year, and the company’s resilience in challenging operating conditions. The revenue fell more than expected to $5.96 billion, down 3.0% compared to last year and 270 basis points shy of consensus, but the margin held up despite the deleverage.

The adjusted revenue is less bad, down only 2%, with global comps down 2% and 1% adjusted. The core U.S. market was the weakest, with a 3.6% decline in comparable sales and a 1% decline in international operated markets. The international developing market segment is the standout, growing by 3.5%. 

The margin news is good, with consolidated net income down 3%, in line with revenue, producing sufficient cash flow and free cash flow to sustain financial health and capital returns. On the bottom line, EPS was also shy of the reported consensus. Still, it reflects the impact of buybacks, falling by only 2% compared to the slightly larger declines of 3% in revenue and operating income.

The company didn’t give revenue guidance, but investors should expect softness to continue, at least in Q2, but there is a forecast for margin. The company expects the full-year operating margin to be in the mid-to-high 40% range, suggesting flat to improving margins as the year progresses. 

Analysts' Sentiment May Cap Gains for MCD in Q2

Analysts are generally bullish on MCD stock and rate it as a Moderate Buy with bullish bias. However, the trend in Q2 is price target reduction, which is unlikely to end following the Q1 release. At best, the analysts will reaffirm current ratings and targets, which suggest the stock is fairly valued near its all-time weekly closing high of $323.

The risk in Q2 is that the analyst will trim targets or reduce ratings, which could strengthen the market headwind and potentially lead to a correction in this stock. Unlike many S&P 500 and restaurant stocks, McDonald’s did not correct in Q1 and early Q2 and is set up to do so as Q2 draws to a close. The upshot is that a correction in Q2 would set up a buying opportunity for the second half and 2026. 

Following the release, MCD's price action is bearish. Premarket trading shows the stock price down more than 1% and showing resistance at the all-time high. If the market follows through on this signal, MCD shares could decline by 5% to 10% to retest support near $300 and $280.