McDonald’s Corp. (MCD) Stock Rating Lowered by Zacks Investment Research
McDonald’s Corp. (NYSE:MCD) was downgraded by Zacks Investment Research from a “buy” rating to a “hold” rating in a research note issued on Monday.
According to Zacks, “McDonald’s third-quarter adjusted earnings of $1.62 per share topped the Zacks Consensus Estimate by 9.5% and were up 15.7% year over year on the back of the turnaround plan announced in May 2015. Total revenue of $6.42 billion beat the consensus mark by 2.1% but fell 3% year over year mainly due to currency headwinds. Meanwhile, the company recorded the fifth consecutive quarter of positive global comps growth. Notably, the company is trying to strengthen its position via various sales and digital initiatives like menu innovation, introduction of value meals, reimaging of restaurants, efficient marketing and promotions, improved service, roll-out of self-order kiosks, mobile app and a digital menu. However, higher labor costs, along with currency headwinds, might hurt profits. Further, a soft consumer spending environment in the U.S. restaurant space and macroeconomic concerns in various parts of the world is likely to limit revenue growth.”
Several other research analysts have also commented on MCD. Cowen and Company reaffirmed a “hold” rating on shares of McDonald’s Corp. in a research report on Monday, July 18th. Nomura set a $129.00 price target on McDonald’s Corp. and gave the stock a “neutral” rating in a research report on Wednesday, July 20th. Wells Fargo & Co. reaffirmed a “market perform” rating on shares of McDonald’s Corp. in a research report on Wednesday, July 20th. RBC Capital Markets reaffirmed a “buy” rating and set a $140.00 price target on shares of McDonald’s Corp. in a research report on Friday, July 22nd. Finally, Jefferies Group set a $115.00 price target on McDonald’s Corp. and gave the stock a “neutral” rating in a research report on Tuesday, July 26th. Two investment analysts have rated the stock with a sell rating, sixteen have given a hold rating and sixteen have assigned a buy rating to the company’s stock. The company currently has a consensus rating of “Hold” and a consensus target price of $126.47.
McDonald’s Corp. (NYSE:MCD) opened at 118.32 on Monday. The stock’s 50 day moving average price is $113.61 and its 200-day moving average price is $119.33. McDonald’s Corp. has a 12 month low of $109.60 and a 12 month high of $131.96. The stock has a market cap of $98.26 billion, a price-to-earnings ratio of 22.23 and a beta of 0.63.
McDonald’s Corp. (NYSE:MCD) last posted its earnings results on Friday, October 21st. The fast-food giant reported $1.62 earnings per share for the quarter, topping the consensus estimate of $1.49 by $0.13. The firm earned $6.42 billion during the quarter, compared to analysts’ expectations of $6.28 billion. McDonald’s Corp. had a return on equity of 197.51% and a net margin of 18.74%. The firm’s revenue was down 2.9% compared to the same quarter last year. During the same quarter in the previous year, the business earned $1.40 earnings per share. Equities research analysts predict that McDonald’s Corp. will post $5.69 EPS for the current year.
The firm also recently declared a quarterly dividend, which will be paid on Thursday, December 15th. Investors of record on Thursday, December 1st will be issued a $0.94 dividend. The ex-dividend date of this dividend is Tuesday, November 29th. This represents a $3.76 dividend on an annualized basis and a yield of 3.18%. This is an increase from McDonald’s Corp.’s previous quarterly dividend of $0.89. McDonald’s Corp.’s dividend payout ratio is currently 67.30%.
In related news, Chairman Andrew J. Mckenna sold 30,000 shares of the stock in a transaction dated Monday, October 24th. The stock was sold at an average price of $113.48, for a total value of $3,404,400.00. Following the completion of the transaction, the chairman now owns 72,514 shares of the company’s stock, valued at $8,228,888.72. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at the SEC website. 0.28% of the stock is owned by corporate insiders.
A number of hedge funds and other institutional investors have recently added to or reduced their stakes in the company. Glassman Wealth Services increased its stake in shares of McDonald’s Corp. by 27.4% in the second quarter. Glassman Wealth Services now owns 930 shares of the fast-food giant’s stock valued at $112,000 after buying an additional 200 shares during the period. Invictus RG increased its stake in shares of McDonald’s Corp. by 364.1% in the first quarter. Invictus RG now owns 919 shares of the fast-food giant’s stock valued at $115,000 after buying an additional 721 shares during the period. Balentine LLC increased its stake in shares of McDonald’s Corp. by 50.3% in the third quarter. Balentine LLC now owns 1,064 shares of the fast-food giant’s stock valued at $123,000 after buying an additional 356 shares during the period. Thomas J. Herzfeld Advisors Inc. increased its stake in shares of McDonald’s Corp. by 183.5% in the second quarter. Thomas J. Herzfeld Advisors Inc. now owns 1,066 shares of the fast-food giant’s stock valued at $128,000 after buying an additional 690 shares during the period. Finally, Timber Creek Capital Management LLC increased its stake in shares of McDonald’s Corp. by 150.7% in the third quarter. Timber Creek Capital Management LLC now owns 1,281 shares of the fast-food giant’s stock valued at $147,000 after buying an additional 770 shares during the period. 67.80% of the stock is currently owned by institutional investors.
McDonald’s Corp. Company Profile
McDonald’s Corporation (McDonald’s) operates and franchises McDonald’s restaurants. The Company’s restaurants serve a locally-relevant menu of quality food and drinks sold at various price points in over 100 countries. The Company’s segments include U.S., International Lead Markets, High Growth Markets and Foundational Markets and Corporate.
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