Mcdonald’s (MCD) Upgraded to Buy at Zacks Investment Research

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Zacks Investment Research upgraded shares of Mcdonald’s (NYSE:MCD) from a hold rating to a buy rating in a research note published on Wednesday. They currently have $208.00 price target on the fast-food giant’s stock.

According to Zacks, “McDonald’s impressive earnings surprise history, various sales and digital initiatives as well as positive comparable sales have helped the stock to outperform its industry in the past six months. Also, earning estimate for 2018 have increased over the past month. Furthermore, increased focus on delivery and accelerated deployment of Experience of the Future restaurants in the United States should boost its performance. These apart, the company’s efforts to drive growth in International Lead & High Growth Markets bode well. In fact, global comps at McDonald’s have been positive over the trailing 13 quarters. Yet, high labor costs and currency headwinds remain major concerns. Moreover, revenues have been under pressure for quite some time due to strategic refranchising initiatives. Even its heightened focus on refranchising should cut the capital requirements and facilitate EPS growth.”

Several other research firms have also recently issued reports on MCD. Morningstar set a $190.00 price objective on shares of Mcdonald’s and gave the company a neutral rating in a research report on Wednesday, October 24th. Royal Bank of Canada reissued a buy rating and issued a $175.00 price objective on shares of Mcdonald’s in a research report on Thursday, September 27th. Stephens boosted their price objective on shares of Mcdonald’s to $170.00 and gave the company an equal weight rating in a research report on Wednesday, October 24th. ValuEngine raised shares of Mcdonald’s from a hold rating to a buy rating in a research report on Thursday, October 11th. Finally, Goldman Sachs Group reissued a buy rating and issued a $195.00 price objective on shares of Mcdonald’s in a research report on Friday, October 26th. Seven research analysts have rated the stock with a hold rating and twenty-five have given a buy rating to the company’s stock. The company has a consensus rating of Buy and an average price target of $191.69.

Mcdonald’s stock opened at $182.96 on Wednesday. The stock has a market capitalization of $142.97 billion, a price-to-earnings ratio of 27.47, a P/E/G ratio of 2.72 and a beta of 0.55. Mcdonald’s has a 1 year low of $146.84 and a 1 year high of $190.88.

Mcdonald’s (NYSE:MCD) last released its quarterly earnings data on Tuesday, October 23rd. The fast-food giant reported $2.10 earnings per share (EPS) for the quarter, beating the consensus estimate of $1.99 by $0.11. The company had revenue of $5.37 billion during the quarter, compared to analysts’ expectations of $5.28 billion. Mcdonald’s had a net margin of 24.56% and a negative return on equity of 116.43%. The firm’s quarterly revenue was down 6.7% on a year-over-year basis. During the same period in the previous year, the company earned $1.76 EPS. As a group, equities research analysts anticipate that Mcdonald’s will post 7.76 earnings per share for the current year.

The firm also recently declared a quarterly dividend, which will be paid on Monday, December 17th. Stockholders of record on Monday, December 3rd will be given a $1.16 dividend. This represents a $4.64 annualized dividend and a dividend yield of 2.54%. The ex-dividend date of this dividend is Friday, November 30th. This is a boost from Mcdonald’s’s previous quarterly dividend of $1.01. Mcdonald’s’s dividend payout ratio is presently 69.67%.

In related news, EVP Francesca A. Debiase sold 15,136 shares of the business’s stock in a transaction that occurred on Wednesday, October 24th. The shares were sold at an average price of $176.17, for a total transaction of $2,666,509.12. Following the completion of the transaction, the executive vice president now owns 17,306 shares in the company, valued at approximately $3,048,798.02. The transaction was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, insider Ian Frederick Borden sold 4,782 shares of the business’s stock in a transaction that occurred on Thursday, October 25th. The stock was sold at an average price of $177.68, for a total transaction of $849,665.76. The disclosure for this sale can be found here. Insiders sold a total of 221,041 shares of company stock valued at $38,839,407 in the last ninety days. Corporate insiders own 0.22% of the company’s stock.

Several hedge funds and other institutional investors have recently bought and sold shares of MCD. Main Street Research LLC increased its stake in Mcdonald’s by 1.0% during the 3rd quarter. Main Street Research LLC now owns 30,944 shares of the fast-food giant’s stock valued at $5,177,000 after purchasing an additional 299 shares in the last quarter. Howard Capital Management increased its stake in Mcdonald’s by 1.7% during the 3rd quarter. Howard Capital Management now owns 18,127 shares of the fast-food giant’s stock valued at $3,032,000 after purchasing an additional 300 shares in the last quarter. Palisade Asset Management LLC increased its stake in Mcdonald’s by 0.4% during the 3rd quarter. Palisade Asset Management LLC now owns 75,193 shares of the fast-food giant’s stock valued at $12,579,000 after purchasing an additional 300 shares in the last quarter. Gilman Hill Asset Management LLC increased its stake in Mcdonald’s by 13.4% during the 3rd quarter. Gilman Hill Asset Management LLC now owns 2,531 shares of the fast-food giant’s stock valued at $423,000 after purchasing an additional 300 shares in the last quarter. Finally, Parsec Financial Management Inc. increased its stake in Mcdonald’s by 8.3% during the 3rd quarter. Parsec Financial Management Inc. now owns 3,933 shares of the fast-food giant’s stock valued at $658,000 after purchasing an additional 300 shares in the last quarter. Hedge funds and other institutional investors own 67.22% of the company’s stock.

About Mcdonald’s

McDonald's Corporation operates and franchises McDonald's restaurants in the United States and internationally. Its restaurants offer various food products, soft drinks, coffee, and other beverages, as well as breakfast menu. As of December 31, 2017, the company operated 37,241 restaurants, including 34,108 franchised restaurants comprising 21,366 franchised to conventional franchisees, 6,945 licensed to developmental licensees, and 5,797 licensed to foreign affiliates; and 3,133 company-operated restaurants.

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