On October 11, 2023, analysts at Morgan Stanley released a report on McDonald’s (NYSE:MCD), lowering their price objective from $330.00 to $315.00. The fast-food giant’s stock currently holds an “overweight” rating from the firm. With Morgan Stanley’s target price, there is a potential upside of 25.20% from McDonald’s current price.
During Wednesday’s trading session, shares of McDonald’s stock rose by $0.07 and reached a price of $251.59. A total of 683,751 shares were exchanged, which is lower than the average trading volume of 2,570,714 shares. It is important to note that McDonald’s fifty-day moving average price stands at $276.74, while its 200-day moving average price is at $285.73. Over the past year, the company’s stock has fluctuated between its low of $234.46 and its high of $299.35.
McDonald’s boasts a market capitalization of approximately $183.35 billion and possesses a P/E ratio of 23.18 with a beta value of 0.65. Additionally, it has a price-to-earnings-growth ratio (PEG) of 2.43.
In terms of investment activity in McDonald’s, hedge funds and institutional investors have made recent adjustments to their positions in the stock. Dfpg Investments LLC witnessed a growth in their position by 10.9% during the second quarter and now owns 10,807 shares valued at approximately $3,179,000 after acquiring an additional 1,062 shares in the last quarter.
Similarly, First Fiduciary Investment Counsel Inc., during Q1 this year increased its position in McDonald’s by 12.% and now holds approximately 900 shares valued at around $252,o00 after acquiring an additional 100 shares in the last quarter. Northwest Bancshares Inc., on the other hand, raised its holdings in McDonald’s by 1.8% in the second quarter and now has 4,056 shares worth approximately $1.21 million after acquiring an additional 70 shares during the period.
MBE Wealth Management LLC experienced a 4.5% increase in their position during Q1 this year and currently owns 1,825 shares of McDonald’s stock valued at $510,000 after acquiring an additional 79 shares in the last quarter. Lastly, Avantax Advisory Services Inc. boosted their holdings by 20.3% in Q1 and currently holds approximately 43,252 shares worth $12,094,000 after purchasing an additional 7,312 shares.
It is important to highlight that hedge funds and institutional investors own around 67.60% of McDonald’s common stock.
In terms of financial performance, McDonald’s released its quarterly earnings data on Thursday, July 27th. The fast-food giant reported earnings per share (EPS) of $3.17 for the quarter, surpassing analysts’ consensus estimates of $2.77 by $0.40. McDonald’s net margin stood at 33.06%, and it showed a negative return on equity of 139.57%. The company generated revenue amounting to $6.50 billion during the quarter; this number exceeded analysts’ expectations of $6.30 billion.
Comparing with the same period during the prior year when it earned EPS of $2.55, McDonald’s witnessed a significant improvement in quarterly revenue growth with a year-over-year increase of 13.6%. Equities research analysts anticipate that for the current year, McDonald’s will post earnings per share (EPS) amounting to approximately 11.52.
In conclusion, Morgan Stanley lowered its price objective for McDonald’s from $330.00 to $315.00 while maintaining an “overweight” rating for the fast-food giant’s stock. It is important to note that these figures and evaluations are accurate as of October 11, 2023.
Analyst Opinions and Insider Trading: Analyzing McDonald’s Performance and Prospects
In recent years, McDonald’s has been subject to scrutiny and analysis by various professionals in the financial field. It seems that analysts have differing opinions on the company’s performance, with some expressing caution while others offer more positive outlooks. Bank of America, for instance, increased their price target from $319.00 to $343.00 but maintained a “neutral” rating for McDonald’s in their report on July 28th.
In contrast, Citigroup reduced their target price from $317.00 to $283.00 while also assigning a “neutral” rating on October 2nd. This discrepancy in ratings and predictions is further evident when looking at Barclays’ research report, where they raised the stock’s price objective from $330.00 to $345.00 alongside an “overweight” rating on July 28th.
On October 2nd, BTIG Research took a somewhat pessimistic stance by dropping their price objective from $315.00 to $300.00. However, not all analysts share this sentiment, as Oppenheimer decided to increase their target price on McDonald’s shares from $315.00 to $330.00 on July 28th.
When considering these differing opinions, it becomes clear that there is no consensus among analysts regarding McDonald’s stock and its future prospects. While five analysts rate the stock as “hold,” twenty-four others give it a “buy” rating.
According to Bloomberg data cited in the text, and taking into account these varied ratings given by analysts, the consensus view appears to be leaning towards a “Moderate Buy” recommendation for McDonald’s with an average price target of $321.50.
Aside from analyst views and predictions about the company’s future performance, insider trading activity within McDonald’s has also caught attention recently. Insider Joseph M. Erlinger sold 4,487 shares of the stock on Friday, July 21st at an average price of $297.87, resulting in a total transaction of $1,336,542.69. Following this sale, Erlinger now holds 11,412 shares in the company, valued at $3,399,292.44.
Another significant insider transaction occurred on Tuesday, August 8th when EVP Marion K. Gross sold 3,000 shares of McDonald’s stock at an average price of $289.52. The total value of this transaction amounted to $868,560.00. Consequently, Gross currently possesses 1,605 shares valued at $464,679.60.
It is worth noting that over the last quarter alone, insiders have sold a substantial number of McDonald’s stock totaling 24,443 shares with a total value of $6,916,994. These insider actions are indicative of their perception and confidence in the company’s future prospects.
In conclusion, analysts’ opinions on McDonald’s stock vary significantly from “neutral” to “overweight.” The consensus rating among analysts suggests a “Moderate Buy” view with an average price target of $321.50 based on Bloomberg data. Additionally, recent insider transactions by Joseph M. Erlinger and Marion K. Gross may also offer insights into their beliefs about the company’s trajectory moving forward as they divested substantial amounts of McDonald’s stock during these sales transactions.
Overall, it is clear that both internal and external factors have contributed to the complexity surrounding McDonald’s as investors strive to grasp the true picture of its market performance and potential for future growth or stabilization.