McDonald’s (NYSE:MCD) Shares Climb 1.8% – Here’s Why

by · The Markets Daily

Shares of McDonald’s Corporation (NYSE:MCD – Get Free Report) traded up 1.8% on Thursday. The company traded as high as $245.46 and last traded at $242.6710. Approximately 6,597,383 shares traded hands during trading, an increase of 55% from the average daily volume of 4,252,348 shares. The stock had previously closed at $238.31.

Trending Headlines about McDonald’s

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

  • Positive Sentiment: McDonald’s is bringing back a popular limited-time meal, while Halloween Boo Buckets are returning with a Disney-themed design. The promotions could support traffic, customer engagement and comparable-store sales. McDonald’s Is Bringing Back a Fan-Favorite Meal
  • Positive Sentiment: McDonald’s dividend remains a key attraction: the company has joined the “Dividend King” group after decades of consecutive increases. Income-oriented investors may view the yield above 3% and recurring franchise cash flow favorably. McDonald’s Dividend King Status
  • Positive Sentiment: Unusually heavy call-option activity and a broader rotation from technology into beaten-down consumer stocks may be providing additional short-term support for MCD. Consumer Stocks Get a Lift as Investors Rotate Out of Tech
  • Neutral Sentiment: Analysts and market commentators generally see the stock as near fair value following its dividend increase. McDonald’s has fallen substantially this year, but investors still need evidence that cash-flow and earnings growth can justify the valuation. McDonald’s May Trade Near Fair Value
  • Neutral Sentiment: The company’s planned multibillion-dollar modernization, including drive-thru technology and the “Archy” AI initiative, could improve efficiency over time, although execution and return-on-investment risks remain. McDonald’s Overhaul and AI Drive-Thru
  • Negative Sentiment: McDonald’s faces a challenging third-quarter outlook, with weak U.S. sales and questions about value-menu execution. Renewed promotions and operational fixes will need to translate into sustained traffic and earnings growth. Challenging Q3 Outlook
  • Negative Sentiment: Some investors argue that an attractive dividend alone is insufficient because the stock’s valuation leaves limited room for disappointment if sales and earnings remain pressured. McDonald’s Dividend Yield and Valuation

Wall Street Analysts Forecast Growth

A number of equities analysts have commented on MCD shares. UBS Group set a $260.00 target price on shares of McDonald’s in a report on Thursday, September 24th. Seaport Research Partners initiated coverage on shares of McDonald’s in a report on Wednesday, September 16th. They issued a “neutral” rating on the stock. Guggenheim lowered their price target on shares of McDonald’s from $290.00 to $250.00 and set a “neutral” rating on the stock in a report on Monday, October 5th. Deutsche Bank Aktiengesellschaft cut their price objective on shares of McDonald’s from $325.00 to $300.00 and set a “buy” rating on the stock in a research report on Monday, September 14th. Finally, Mizuho reduced their price objective on shares of McDonald’s from $300.00 to $290.00 and set a “neutral” rating for the company in a research note on Friday, July 31st. One equities research analyst has rated the stock with a Strong Buy rating, twenty-two have issued a Buy rating, thirteen have issued a Hold rating and one has assigned a Sell rating to the company’s stock. According to data from MarketBeat, the stock presently has an average rating of “Moderate Buy” and an average target price of $295.94.

Read Our Latest Stock Report on MCD

McDonald’s Trading Up 0.2%

The stock has a 50-day moving average price of $252.05 and a two-hundred day moving average price of $272.09. The stock has a market cap of $171.95 billion, a price-to-earnings ratio of 19.74, a PEG ratio of 2.72 and a beta of 0.44.

McDonald’s (NYSE:MCD – Get Free Report) last announced its 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 negative return on equity of 572.06% and a net margin of 31.72%. The company had revenue of $7.10 billion for the quarter, compared to analyst estimates of $7.13 billion. During the same period in the prior year, the company posted $3.19 EPS. The firm’s quarterly revenue was up 3.7% compared to the same quarter last year. Research analysts predict that McDonald’s Corporation will post 12.84 earnings per share for the current fiscal year.

McDonald’s Increases Dividend

The firm also recently declared a quarterly dividend, which will be paid on Tuesday, December 15th. Stockholders of record on Tuesday, December 1st will be paid a dividend of $1.93 per share. The ex-dividend date is Tuesday, December 1st. This is a positive change from McDonald’s’s previous quarterly dividend of $1.86. This represents a $7.72 dividend on an annualized basis and a dividend yield of 3.2%. McDonald’s’s payout ratio is presently 60.44%.

Hedge Funds Weigh In On McDonald’s

Hedge funds have recently modified their holdings of the stock. Ascentis Wealth Management LLC increased its stake in McDonald’s by 4,008.8% during the 2nd quarter. Ascentis Wealth Management LLC now owns 84,230 shares of the fast-food giant’s stock worth $22,768,000 after buying an additional 82,180 shares during the period. Ridgewood Investments LLC acquired a new stake in McDonald’s during the 3rd quarter worth approximately $1,026,000. Borer Denton & Associates Inc. boosted its position in McDonald’s by 16.9% in the 2nd quarter. Borer Denton & Associates Inc. now owns 13,859 shares of the fast-food giant’s stock valued at $3,746,000 after buying an additional 2,000 shares during the period. HighTower Advisors LLC boosted its position in McDonald’s by 7.1% in the 2nd quarter. HighTower Advisors LLC now owns 1,471,725 shares of the fast-food giant’s stock valued at $397,822,000 after buying an additional 97,060 shares during the period. Finally, Viking Fund Management LLC grew its stake in shares of McDonald’s by 60.0% in the third quarter. Viking Fund Management LLC now owns 40,000 shares of the fast-food giant’s stock worth $9,238,000 after acquiring an additional 15,000 shares in the last quarter. Institutional investors and hedge funds own 70.29% of the company’s stock.

About McDonald’s

(Get Free Report)

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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