McDonald’s (NYSE:MCD) Sees Unusually-High Trading Volume – Should You Buy?

McDonald’s Corporation (NYSE:MCD) saw unusually-strong trading volume on Wednesday . Approximately 8,824,087 shares were traded during trading, an increase of 118% from the previous session’s volume of 4,050,349 shares.The stock last traded at $235.0660 and had previously closed at $250.35.

Key Headlines Impacting McDonald’s

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

• Positive Sentiment: McDonald’s introduced its “NEXT” strategy, which includes restaurant renovations, improved equipment and technology, employee training, better food quality and service upgrades. Management is targeting higher operating margins by 2030 and expects the plan to support productivity and market-share gains. McDonald’s will spend big on restaurant upgrades and training
• Positive Sentiment: The company plans to expand beyond traditional burgers with hand-breaded or grilled chicken, wraps, egg bites and bowls. The menu changes are intended to capture demand for protein and smaller portions, including among consumers using GLP-1 weight-loss medications. AI-enabled drive-throughs and digital tools could also improve speed and convenience. McDonald’s plans modernization and menu changes
• Neutral Sentiment: McDonald’s will provide approximately $8.5 billion in franchisee support through 2036, including about $5 billion through 2030 for rent relief, capital contributions and restaurant upgrades. The investment could strengthen franchisee economics and execution, but benefits will take time to materialize. McDonald’s franchisee support plan
• Negative Sentiment: Investors are concerned that the multibillion-dollar commitment will pressure cash flow, margins and shareholder returns before the expected operational improvements arrive. The large spending plan was a key reason MCD declined during trading. McDonald’s restaurant investment plan
• Negative Sentiment: CEO Chris Kempczinski warned that traffic in McDonald’s wholly owned markets is expected to remain flat while inflation stays elevated. That outlook raises concerns about weak consumer demand, higher food and labor costs, and limited near-term sales growth. McDonald’s CEO on inflation and flat traffic

Wall Street Analyst Weigh In

A number of brokerages have issued reports on MCD. Robert W. Baird upgraded McDonald’s to a “hold” rating in a research note on Monday, August 24th. Tigress Financial boosted their price objective on McDonald’s from $385.00 to $390.00 and gave the company a “buy” rating in a research report on Friday, July 17th. BTIG Research reaffirmed a “buy” rating and issued a $350.00 price objective on shares of McDonald’s in a research note on Wednesday, September 16th. Piper Sandler set a $286.00 target price on McDonald’s in a research report on Tuesday, August 4th. Finally, KeyCorp reissued an “overweight” rating on shares of McDonald’s in a research note on Monday. One equities research analyst has rated the stock with a Strong Buy rating, sixteen have assigned a Buy rating and eleven have issued a Hold rating to the company’s stock. According to MarketBeat, the stock presently has an average rating of “Moderate Buy” and an average price target of $317.04.

McDonald’s Stock Down 5.2%

The company has a market capitalization of $168.00 billion, a P/E ratio of 19.29, a price-to-earnings-growth ratio of 2.68 and a beta of 0.41. The business has a 50 day moving average of $264.12 and a 200 day moving average of $282.34.

McDonald’s (NYSE:MCD) last issued its quarterly earnings data on Tuesday, August 4th. The fast-food giant reported $3.38 earnings per share (EPS) for the quarter, topping the consensus estimate of $3.32 by $0.06. The business had revenue of $7.10 billion for the quarter, compared to analysts’ expectations of $7.13 billion. McDonald’s had a negative return on equity of 572.06% and a net margin of 31.72%.The company’s revenue for the quarter was up 3.7% on a year-over-year basis. During the same period in the prior year, the firm earned $3.19 EPS. On average, research analysts anticipate that McDonald’s Corporation will post 12.88 EPS for the current year.

McDonald’s Increases Dividend

The business also recently announced a quarterly dividend, which will be paid on Tuesday, December 15th. Stockholders of record on Tuesday, December 1st will be issued a $1.93 dividend. This is a positive change from McDonald’s’s previous quarterly dividend of $1.86. The ex-dividend date is Tuesday, December 1st. This represents a $7.72 dividend on an annualized basis and a dividend yield of 3.3%. McDonald’s’s dividend payout ratio (DPR) is presently 60.44%.

Hedge Funds Weigh In On McDonald’s

A number of large investors have recently made changes to their positions in the company. Ascentis Wealth Management LLC raised 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 purchasing an additional 82,180 shares in the last quarter. Borer Denton & Associates Inc. boosted its position in shares of 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 purchasing an additional 2,000 shares during the period. Peterson Wealth Services grew its position in shares of McDonald’s by 3,294.5% during the fourth quarter. Peterson Wealth Services now owns 11,779 shares of the fast-food giant’s stock worth $3,600,000 after acquiring an additional 11,432 shares during the last quarter. HighTower Advisors LLC grew its position in McDonald’s by 7.1% during the 2nd quarter. HighTower Advisors LLC now owns 1,471,725 shares of the fast-food giant’s stock worth $397,822,000 after purchasing an additional 97,060 shares during the last quarter. Finally, Harbour Investments Inc. increased its position in McDonald’s by 84.4% in the 4th quarter. Harbour Investments Inc. now owns 35,510 shares of the fast-food giant’s stock valued at $10,853,000 after acquiring an additional 16,252 shares during the period. 70.29% of the stock is owned by hedge funds and other 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.