McDonald’s (NYSE:MCD) Raised to “Strong-Buy” at Freedom Capital

McDonald’s (NYSE:MCD) was upgraded by analysts at Freedom Capital from a “hold” rating to a “strong-buy” rating in a report issued on Wednesday,Zacks.com reports.

Other research analysts have also recently issued reports about the company. Wells Fargo & Company reduced their price target on McDonald’s from $320.00 to $300.00 and set an “overweight” rating for the company in a research report on Thursday, July 16th. JPMorgan Chase & Co. lowered their price target on McDonald’s from $325.00 to $305.00 and set an “overweight” rating on the stock in a research report on Monday, May 11th. BTIG Research reiterated a “buy” rating and set a $350.00 price objective on shares of McDonald’s in a research note on Wednesday. UBS Group set a $305.00 price objective on McDonald’s in a report on Wednesday. Finally, Weiss Ratings cut shares of McDonald’s from a “hold (c+)” rating to a “hold (c)” rating in a research note on Tuesday, June 23rd. One equities research analyst has rated the stock with a Strong Buy rating, sixteen have issued a Buy rating and twelve have assigned a Hold rating to the company. According to data from MarketBeat.com, the company presently has a consensus rating of “Moderate Buy” and an average price target of $325.44.

McDonald’s Price Performance

Shares of NYSE:MCD opened at $276.05 on Wednesday. The company’s 50-day moving average price is $274.14 and its two-hundred day moving average price is $296.58. McDonald’s has a one year low of $260.96 and a one year high of $341.75. The stock has a market capitalization of $196.13 billion, a PE ratio of 22.42, a price-to-earnings-growth ratio of 2.94 and a beta of 0.41.

McDonald’s (NYSE:MCD) last announced its quarterly earnings data on Tuesday, August 4th. The fast-food giant reported $3.38 earnings per share for the quarter, beating the consensus estimate of $3.32 by $0.06. The company had revenue of $7.10 billion during the quarter, compared to analysts’ expectations of $7.13 billion. McDonald’s had a negative return on equity of 512.80% and a net margin of 31.72%.McDonald’s’s revenue for the quarter was up 3.7% compared to the same quarter last year. During the same quarter last year, the company earned $3.19 EPS. On average, analysts anticipate that McDonald’s will post 12.86 earnings per share for the current fiscal year.

Insider Buying and Selling

In other McDonald’s news, EVP Desiree Ralls-Morrison sold 2,763 shares of the business’s stock in a transaction that occurred on Thursday, May 28th. The stock was sold at an average price of $278.36, for a total transaction of $769,108.68. Following the transaction, the executive vice president owned 6,268 shares of the company’s stock, valued at $1,744,760.48. The trade was a 30.59% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, insider Joseph M. Erlinger sold 5,252 shares of the company’s stock in a transaction that occurred on Wednesday, June 10th. The shares were sold at an average price of $284.32, for a total value of $1,493,248.64. Following the completion of the sale, the insider owned 7,734 shares in the company, valued at $2,198,930.88. This represents a 40.44% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. In the last three months, insiders have sold 8,348 shares of company stock worth $2,355,634. Company insiders own 0.26% of the company’s stock.

Institutional Investors Weigh In On McDonald’s

Hedge funds have recently added to or reduced their stakes in the business. Norges Bank bought a new stake in shares of McDonald’s during the fourth quarter worth approximately $2,890,438,000. Bank of New York Mellon Corp bought a new position in shares of McDonald’s during the second quarter worth approximately $1,359,276,000. Diamant Asset Management Inc. increased its stake in shares of McDonald’s by 30,979.0% during the first quarter. Diamant Asset Management Inc. now owns 2,596,340 shares of the fast-food giant’s stock worth $806,917,000 after purchasing an additional 2,587,986 shares during the period. J. Stern & Co. LLP lifted its holdings in McDonald’s by 9,867.5% during the 4th quarter. J. Stern & Co. LLP now owns 2,541,008 shares of the fast-food giant’s stock worth $776,608,000 after purchasing an additional 2,515,515 shares during the last quarter. Finally, Viking Global Investors LP boosted its stake in McDonald’s by 171.7% in the 2nd quarter. Viking Global Investors LP now owns 3,125,432 shares of the fast-food giant’s stock valued at $913,157,000 after purchasing an additional 1,974,998 shares during the period. Institutional investors and hedge funds own 70.29% of the company’s stock.

More McDonald’s News

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

• Positive Sentiment: Quarterly profit exceeded expectations. McDonald’s reported adjusted earnings of $3.38 per share, above the $3.32 consensus estimate, while revenue rose 3.7% year over year to $7.10 billion. The earnings beat and 31.7% net margin provide support for the stock. McDonald’s posts strong second quarter profit, names new leader for US market
• Positive Sentiment: Analyst support and income appeal remain intact. BTIG reaffirmed its Buy rating with a $350 price target, while the stock’s dividend and consensus Moderate Buy view may attract investors after the recent weakness. BTIG rating reaffirmed
• Positive Sentiment: Management is taking corrective action. McDonald’s appointed a new U.S. leader and is reviewing value offers, digital promotions, restaurant workloads and marketing execution. Stronger international performance could help offset domestic softness. MCD Q2 Earnings Call Flags U.S. Execution Gaps
• Neutral Sentiment: Price targets were reduced but remain above the current level. Morgan Stanley, RBC and Baird lowered their targets to $319, $295 and $285, respectively, citing a more cautious near-term outlook. Their ratings range from Equal Weight to Neutral. Analyst price-target changes
• Negative Sentiment: U.S. growth remains the central concern. Domestic comparable sales rose only 0.8% in the second quarter, and management acknowledged that the current value menu is too complicated and that reduced digital discounts have hurt traffic. Lower-income customers are also spending less at McDonald’s. McDonald’s Looks to Fix a Value Misfire
• Negative Sentiment: Competitive pressure is increasing. Burger King is gaining U.S. sales momentum after revamping its Whopper, while McDonald’s expansion toward 50,000 restaurants is taking longer than planned because of economic conditions. Burger King’s US sales surge while McDonald’s growth flails

McDonald’s Company Profile

McDonald’s Corporation (NYSE: MCD) is a global quick-service restaurant company best known for its hamburgers, French fries and breakfast offerings. The company develops, operates and franchises a system of restaurants that sell a range of food and beverage items, including signature products such as the Big Mac, Quarter Pounder, Chicken McNuggets, McCafé coffee beverages and a variety of salads, desserts and seasonal menu items. McDonald’s serves customers through company-operated restaurants and franchised locations, and it supports sales via dine-in, drive-thru, digital ordering platforms and third-party delivery partnerships.

Founded in 1940 by brothers Richard and Maurice McDonald as a single San Bernardino, California restaurant, the business was transformed into a franchising model after Ray Kroc joined in the mid-1950s and led the brand’s national and international expansion.