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S&P 500   5,137.08
DOW   39,087.38
QQQ   445.61
Lawyers who successfully argued Musk pay package was illegal seek $5.6 billion in Tesla stock
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
Sports analytics may be outnumbered when it comes to artificial intelligence
Chicago 'mansion' tax to fund homeless services stuck in legal limbo while on the ballot
Critical asset just had biggest fall on record (Ad)
Norway's hospitalized king gets a pacemaker in Malaysia after falling ill during vacation
Head Start preschools aim to fight poverty, but their teachers struggle to make ends meet
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
What to watch for as China's major political meeting of the year gets underway
S&P 500   5,137.08
DOW   39,087.38
QQQ   445.61
Lawyers who successfully argued Musk pay package was illegal seek $5.6 billion in Tesla stock
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
Sports analytics may be outnumbered when it comes to artificial intelligence
Chicago 'mansion' tax to fund homeless services stuck in legal limbo while on the ballot
Critical asset just had biggest fall on record (Ad)
Norway's hospitalized king gets a pacemaker in Malaysia after falling ill during vacation
Head Start preschools aim to fight poverty, but their teachers struggle to make ends meet
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
What to watch for as China's major political meeting of the year gets underway
S&P 500   5,137.08
DOW   39,087.38
QQQ   445.61
Lawyers who successfully argued Musk pay package was illegal seek $5.6 billion in Tesla stock
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
Sports analytics may be outnumbered when it comes to artificial intelligence
Chicago 'mansion' tax to fund homeless services stuck in legal limbo while on the ballot
Critical asset just had biggest fall on record (Ad)
Norway's hospitalized king gets a pacemaker in Malaysia after falling ill during vacation
Head Start preschools aim to fight poverty, but their teachers struggle to make ends meet
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
What to watch for as China's major political meeting of the year gets underway

Will McDonald’s Stock Hit an All-Time HIgh After Earnings?

Will McDonald’s Stock Hit an All-Time HIgh After Earnings?

Key Points

  • McDonald’s is trading slightly lower as concerns over operating margins outweigh an otherwise bullish earnings report. 
  • Strong same-store sales show that consumers are trading down while eating out.  
  • MCD stock may continue to be range-bound but could shoot higher if the Fed indicates inflation is easing. 
  • The stock is a Hold but pays an attractive dividend.  
  • 5 stocks we like better than McDonald's

McDonald’s Corporation NYSE: MCD is down 0.5% in early trading as the fast-food giant says inflation will drag operating margins in 2023.  

That’s detracting from an otherwise bullish earnings report. The company beat on both the top and bottom lines. Revenue came in at $5.93 billion, which was higher than forecasts for $5.75 billion. On the bottom line, the news was equally encouraging. The company delivered adjusted earnings per share (EPS) of $2.59 compared to the $2.44 that was forecast.  

After hitting an all-time high in November 2022, MCD stock has been consolidating. The initial reaction from investors is bringing the stock down to a support level of around $270. If it can hold that level and gets a little help from the Fed, McDonald’s could likely rally to challenge its all-time high.  

Still Lovin’ It 

Investors should always pay more attention to what consumers do and less to what they say. This is particularly true when it comes to McDonald’s.  

Many consumers will say they don’t frequent fast-food restaurant. But the earnings report tells a different story. Comparable store sales in the United States were up an impressive 10.3%. That’s better than what’s been reported from Carrols Restaurant Group, Inc. NASDAQ: TAST, the parent company of Burger King and The Wendy’s Corporation NASDAQ: WEN. Global same-store sales were even high at 12.6% versus the 7.5% expected. 

While it’s true that the company cites new menu offerings and price increases as the reason for this growth, it also confirms the company’s pivot to digital is paying off. The company is test marketing a new restaurant model that features no public seating. The to-go-only restaurant in Fort Worth, Texas, uses a conveyor belt to deliver food to customers who order ahead through the company’s mobile app.  


Shares are Consolidating But … 

MCD stock had been trading in a tight range since the beginning of the year. The pre-market sell-off pushes the stock to a support level of around $270. If the stock holds this level, then investors will look to see if the stock can push past a resistance level at around $275.  

Which way the stock will go may depend to an extent on the Federal Reserve’s decision on interest rates. If the Fed concurs with the opinion that inflation is easing it will likely create a floor on equities. And specific to McDonald’s it may ease concerns about the company’s operating margins in future quarters.  

Hold Your Shares and Wait for Signs to Buy 

The analysts surveyed by MarketBeat give McDonald’s a Moderate Buy rating with a price target of $288.48. That would be an 8% upside from the stock’s current level and put it near its all-time high. That’s not a lot of growth for some investors, but it’s probably consistent with what is being forecast for the broader market. So that makes MCD stock hold for me. 

On the other hand, McDonald’s is a company that will do well no matter what happens with the economy. And in the meantime, investors do get an attractive dividend that currently pays out $6.08 per share on an annual basis.  

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Should you invest $1,000 in McDonald's right now?

Before you consider McDonald's, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and McDonald's wasn't on the list.

While McDonald's currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
McDonald's (MCD)
4.9091 of 5 stars
$290.73-0.5%2.30%25.13Moderate Buy$320.10
Carrols Restaurant Group (TAST)
2.7336 of 5 stars
$9.46-0.1%0.85%157.67Hold$8.87
Wendy's (WEN)
4.9627 of 5 stars
$18.02-0.5%5.55%18.39Hold$22.63
Compare These Stocks  Add These Stocks to My Watchlist 

Chris Markoch

About Chris Markoch

  • CTMarkoch@msn.com

Editor & Contributing Author

Retirement, Individual Investing

Experience

Chris Markoch has been an editor & contributing writer for MarketBeat since 2018.

Areas of Expertise

Value investing, retirement stocks, dividend stocks

Education

Bachelor of Arts, The University of Akron

Past Experience

InvestorPlace


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