McDonald’s (NYSE:MCD) Stock Price Up 2.5% – Should You Buy?

McDonald’s Corporation (NYSE:MCD) was up 2.5% on Thursday. The stock traded as high as $237.50 and last traded at $236.6440. Approximately 11,315,743 shares changed hands during mid-day trading, an increase of 168% from the average daily volume of 4,222,870 shares. The stock had previously closed at $230.88.

Key McDonald’s News

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

• Positive Sentiment: McDonald’s was named an “Undervalued Stock” by BetterInvesting Magazine. Analysts continue to point to the company’s high-margin, largely franchised business model, strong cash generation and attractive valuation after its recent decline. BetterInvesting Magazine update
• Positive Sentiment: The company’s increased dividend and appointment of a new U.S. president reinforce its focus on returning capital and addressing softer domestic traffic. The dividend action may provide support for income-oriented investors. McDonald’s dividend and leadership update
• Positive Sentiment: McDonald’s Monopoly promotion has returned with a $1 million top prize and other rewards. The campaign could boost customer visits and near-term sales, although its financial impact is likely limited relative to broader traffic trends. McDonald’s Monopoly returns
• Neutral Sentiment: Sanford C. Bernstein lowered its price target to $250 and retained a “market perform” rating. The new target remains above the recent trading level, but the reduction signals limited confidence in near-term growth.
• Neutral Sentiment: McDonald’s is investing approximately $8.5 billion to modernize restaurants and potentially revive in-store experiences, including PlayPlace locations. The long-term opportunity is meaningful, but the spending may take time to generate returns. McDonald’s restaurant modernization plans
• Negative Sentiment: McDonald’s faces a proposed federal class-action lawsuit alleging that its AI-assisted pricing tool shares nonpublic sales and pricing information among competing franchisees, potentially facilitating price coordination. McDonald’s denies the allegations, saying the system only recommends prices and does not set menu prices. The case creates legal, regulatory and reputational risks. McDonald’s AI pricing lawsuit
• Negative Sentiment: U.S. franchisees reportedly object to modernization costs of at least $800,000 per restaurant, while value promotions have not yet restored customer traffic. These pressures could weigh on franchisee economics, margins and growth. McDonald’s value promotions and customer traffic

Analyst Ratings Changes

Several research firms recently issued reports on MCD. Melius Research dropped their target price on McDonald’s from $250.00 to $230.00 and set a “sell” rating on the stock in a report on Monday, September 28th. Seaport Research Partners started coverage on McDonald’s in a research report on Wednesday, September 16th. They set a “neutral” rating on the stock. Loop Capital dropped their price objective on McDonald’s from $301.00 to $273.00 and set a “hold” rating on the stock in a research note on Wednesday, August 5th. Mizuho cut their price objective on McDonald’s from $300.00 to $290.00 and set a “neutral” rating for the company in a report on Friday, July 31st. Finally, Freedom Capital raised shares of McDonald’s from a “hold” rating to a “strong-buy” rating in a research note on Wednesday, August 5th. One research analyst has rated the stock with a Strong Buy rating, twenty-two have given a Buy rating, thirteen have issued a Hold rating and one has issued a Sell rating to the company. Based on data from MarketBeat.com, the company presently has an average rating of “Moderate Buy” and an average target price of $295.94.

McDonald’s Stock Up 2.5%

The stock has a market capitalization of $167.46 billion, a price-to-earnings ratio of 19.22, a P/E/G ratio of 2.60 and a beta of 0.44. The company’s fifty day simple moving average is $256.66 and its 200 day simple moving average is $275.31.

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 firm had revenue of $7.10 billion during the quarter, compared to the consensus estimate of $7.13 billion. McDonald’s had a net margin of 31.72% and a negative return on equity of 572.06%. The business’s revenue for the quarter was up 3.7% compared to the same quarter last year. During the same period last year, the business posted $3.19 earnings per share. As a group, analysts anticipate that McDonald’s Corporation will post 12.85 earnings per share for the current year.

McDonald’s Increases Dividend

The firm also recently disclosed a quarterly dividend, which will be paid on Tuesday, December 15th. Shareholders of record on Tuesday, December 1st will be issued a $1.93 dividend. 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 3.3%. This is an increase from McDonald’s’s previous quarterly dividend of $1.86. McDonald’s’s payout ratio is presently 60.44%.

Institutional Inflows and Outflows

Several hedge funds have recently made changes to their positions in the business. Bank of New York Mellon Corp acquired a new stake in shares of McDonald’s in the second quarter valued at approximately $1,359,276,000. Diamant Asset Management Inc. grew its position in 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 buying an additional 2,587,986 shares in the last quarter. J. Stern & Co. LLP increased its stake 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 acquiring an additional 2,515,515 shares during the period. Arrowstreet Capital Limited Partnership increased its stake in McDonald’s by 49.9% during the 4th quarter. Arrowstreet Capital Limited Partnership now owns 3,104,337 shares of the fast-food giant’s stock worth $948,779,000 after acquiring an additional 1,033,041 shares during the period. Finally, State Street Corp raised its holdings in McDonald’s by 2.7% in the 4th quarter. State Street Corp now owns 35,983,997 shares of the fast-food giant’s stock valued at $10,997,789,000 after acquiring an additional 959,140 shares in the last quarter. 70.29% of the stock is owned by institutional investors.

About McDonald’s

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.