McDonald’s (NYSE:MCD) Stock Jumps 2.7% – Time to Buy?

McDonald’s Corporation (NYSE:MCD) traded up 2.7% during mid-day trading on Thursday. The company traded as high as $257.64 and last traded at $257.3360. 4,493,071 shares were traded during trading, an increase of 5% from the average session volume of 4,280,691 shares. The stock had previously closed at $250.50.

Key McDonald’s News

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

• Positive Sentiment: Beaten-down valuation supports a potential rebound. McDonald’s has fallen about 18% this year, making the stock one of the weakest annual performers in decades. Technical analysts suggest the selloff may have gone too far, potentially attracting bargain hunters. Mapping the Market: Beaten-down McDonald’s stock may be ripe for a rally
• Positive Sentiment: Restaurant-sector momentum is helping sentiment. McDonald’s moved higher alongside other restaurant stocks after Chipotle reported stronger-than-expected same-store sales, encouraging investors that customer traffic may be holding up across the industry. Chipotle Jumps 9% as Same-Store Sales Top Estimates
• Positive Sentiment: Value promotions and seasonal products could support traffic. McDonald’s is introducing an $8 Quarter Pounder meal beginning November 2, holiday drinks on November 3 and a Pokémon Happy Meal promotion in November. These offerings may improve value perception and attract families, although their financial impact is uncertain. $8 Quarter Pounder with Cheese meal
• Neutral Sentiment: Upcoming earnings are the next major catalyst. Wall Street expects earnings growth, but one analysis says McDonald’s lacks the indicators typically associated with a likely earnings beat. Investors will focus on U.S. traffic, international demand, margins and management’s outlook. McDonald’s Reports Next Week
• Negative Sentiment: Large-scale technology spending carries execution risk. McDonald’s reported plans for an $8.5 billion overhaul involving an AI drive-through system called Archy. The initiative could improve efficiency, but a previous AI test was scrapped, raising concerns about implementation costs and reliability. McDonald’s $8.5-billion overhaul

Wall Street Analysts Forecast Growth

Several equities research analysts have weighed in on the stock. Deutsche Bank Aktiengesellschaft cut their target price on shares of McDonald’s from $325.00 to $300.00 and set a “buy” rating on the stock in a report on Monday, September 14th. BMO Capital Markets lowered their price objective on shares of McDonald’s from $335.00 to $310.00 and set an “outperform” rating for the company in a research report on Thursday, September 24th. Piper Sandler set a $286.00 price objective on shares of McDonald’s in a research report on Tuesday, August 4th. HSBC dropped their price objective on McDonald’s from $357.00 to $356.00 and set a “buy” rating on the stock in a research note on Wednesday, August 5th. Finally, Argus lowered their price target on McDonald’s from $320.00 to $310.00 and set a “buy” rating for the company in a report on Wednesday, August 26th. One investment analyst has rated the stock with a Strong Buy rating, twenty-two have given a Buy rating, thirteen have given a Hold rating and one has issued a Sell rating to the company’s stock. Based on data from MarketBeat.com, the company currently has a consensus rating of “Moderate Buy” and a consensus target price of $295.64.

McDonald’s Trading Up 2.7%

The stock has a market cap of $182.10 billion, a price-to-earnings ratio of 20.90, a P/E/G ratio of 2.83 and a beta of 0.44. The company has a 50 day simple moving average of $248.68 and a 200-day simple moving average of $283.93.

McDonald’s (NYSE:MCD) last posted its quarterly earnings data on Tuesday, August 4th. The fast-food giant reported $3.38 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $3.32 by $0.06. The business had revenue of $7.10 billion during the quarter, compared to the consensus estimate of $7.13 billion. McDonald’s had a negative return on equity of 572.06% and a net margin of 31.72%. McDonald’s’s quarterly revenue was up 3.7% on a year-over-year basis. During the same period last year, the company earned $3.19 earnings per share. Equities analysts forecast that McDonald’s Corporation will post 12.83 earnings per share for the current fiscal year.

McDonald’s Increases Dividend

The company also recently declared a quarterly dividend, which will be paid on Tuesday, December 15th. Shareholders of record on Tuesday, December 1st will be given a dividend of $1.93 per share. This is an increase from McDonald’s’s previous quarterly dividend of $1.86. The ex-dividend date of this dividend is Tuesday, December 1st. This represents a $7.72 dividend on an annualized basis and a yield of 3.0%. McDonald’s’s payout ratio is currently 60.44%.

Hedge Funds Weigh In On McDonald’s

Several hedge funds have recently made changes to their positions in MCD. Ascentis Wealth Management LLC grew its holdings in shares of McDonald’s by 4,008.8% in the 2nd quarter. Ascentis Wealth Management LLC now owns 84,230 shares of the fast-food giant’s stock valued at $22,768,000 after acquiring an additional 82,180 shares in the last quarter. Ridgewood Investments LLC bought a new stake in McDonald’s during the third quarter worth about $1,026,000. Borer Denton & Associates Inc. boosted its position in McDonald’s by 16.9% during the second quarter. Borer Denton & Associates Inc. now owns 13,859 shares of the fast-food giant’s stock valued at $3,746,000 after purchasing an additional 2,000 shares during the last quarter. HighTower Advisors LLC boosted its position in McDonald’s by 7.1% during the second quarter. HighTower Advisors LLC now owns 1,471,725 shares of the fast-food giant’s stock valued at $397,822,000 after purchasing an additional 97,060 shares during the last quarter. Finally, Viking Fund Management LLC boosted its position in McDonald’s by 60.0% during the third quarter. Viking Fund Management LLC now owns 40,000 shares of the fast-food giant’s stock valued at $9,238,000 after purchasing an additional 15,000 shares during the last quarter. 70.29% of the stock is owned by institutional investors.

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.