Zacks Investment Research Downgrades McDonald's (MCD) to Hold

McDonald's (NYSE:MCD) was downgraded by Zacks Investment Research from a “buy” rating to a “hold” rating in a research note issued to investors on Wednesday.

According to Zacks, “McDonald’s shares outpaced the industry in the past year. Notably, growing guest count remains McDonald’s top priority and it is undertaking various sales and digital initiatives to this end. Increased focus on delivery, enhancement of digital capabilities, and accelerated deployment of Experience of the Future restaurants in the United States should drive growth too. Efforts to attract customers in International Lead & High Growth Markets also bode well. In fact, global comps at McDonald’s have been positive over the past eight quarters. Meanwhile, augmented focus on refranchising will cut the company’s capital requirements and facilitate EPS growth and ROE expansion in the long run. Yet, high labor costs and currency headwinds might keep profits under pressure. Also, political and economic unrest in some parts of the world and a not so enticing U.S. restaurant space might restrict sales growth.”

MCD has been the subject of several other research reports. ValuEngine cut shares of McDonald's from a “buy” rating to a “hold” rating in a report on Friday, December 1st. Goldman Sachs Group set a $180.00 target price on shares of McDonald's and gave the company a “buy” rating in a report on Tuesday, December 12th. Robert W. Baird restated an “outperform” rating and issued a $170.00 target price on shares of McDonald's in a report on Tuesday, October 3rd. Royal Bank of Canada upped their target price on shares of McDonald's from $175.00 to $180.00 and gave the company an “outperform” rating in a report on Friday, October 13th. Finally, Longbow Research upgraded shares of McDonald's from a “neutral” rating to a “buy” rating and upped their target price for the company from $154.05 to $183.00 in a report on Thursday, September 28th. Ten research analysts have rated the stock with a hold rating and twenty-five have given a buy rating to the company. The stock currently has an average rating of “Buy” and a consensus target price of $179.28.

McDonald's (MCD) traded up $1.17 during midday trading on Wednesday, reaching $174.86. 1,824,745 shares of the company’s stock traded hands, compared to its average volume of 3,053,040. The company has a quick ratio of 1.27, a current ratio of 1.28 and a debt-to-equity ratio of -8.17. McDonald's has a 12 month low of $119.82 and a 12 month high of $175.78. The firm has a market cap of $141,610.00, a PE ratio of 25.23, a PEG ratio of 2.75 and a beta of 0.67.

McDonald's (NYSE:MCD) last posted its quarterly earnings results on Tuesday, October 24th. The fast-food giant reported $1.76 EPS for the quarter, topping the consensus estimate of $1.75 by $0.01. McDonald's had a net margin of 24.19% and a negative return on equity of 216.45%. The company had revenue of $5.75 billion during the quarter, compared to analysts’ expectations of $5.75 billion. During the same quarter in the previous year, the business posted $1.62 EPS. The firm’s revenue was down 10.4% on a year-over-year basis. sell-side analysts predict that McDonald's will post 6.53 earnings per share for the current year.

In other news, insider Stephen Easterbrook sold 171,577 shares of the stock in a transaction dated Tuesday, November 21st. The shares were sold at an average price of $168.32, for a total value of $28,879,840.64. Following the completion of the transaction, the insider now owns 49,778 shares in the company, valued at approximately $8,378,632.96. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. Also, VP James R. Sappington sold 8,046 shares of the stock in a transaction dated Wednesday, October 25th. The shares were sold at an average price of $165.00, for a total transaction of $1,327,590.00. Following the completion of the transaction, the vice president now owns 15,739 shares of the company’s stock, valued at approximately $2,596,935. The disclosure for this sale can be found here. 0.24% of the stock is currently owned by corporate insiders.

Several institutional investors and hedge funds have recently made changes to their positions in MCD. Horan Capital Advisors LLC. purchased a new position in shares of McDonald's in the 3rd quarter valued at about $104,000. Phocas Financial Corp. purchased a new position in McDonald's during the 2nd quarter valued at about $107,000. Proficio Capital Partners LLC increased its holdings in McDonald's by 0.7% during the 2nd quarter. Proficio Capital Partners LLC now owns 745 shares of the fast-food giant’s stock valued at $117,000 after acquiring an additional 5 shares in the last quarter. Mitsubishi UFJ Securities Holdings Co. Ltd. increased its holdings in McDonald's by 219.2% during the 3rd quarter. Mitsubishi UFJ Securities Holdings Co. Ltd. now owns 830 shares of the fast-food giant’s stock valued at $130,000 after acquiring an additional 570 shares in the last quarter. Finally, Howe & Rusling Inc. increased its holdings in McDonald's by 75.0% during the 3rd quarter. Howe & Rusling Inc. now owns 840 shares of the fast-food giant’s stock valued at $132,000 after acquiring an additional 360 shares in the last quarter. Institutional investors and hedge funds own 67.30% of the company’s stock.

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About McDonald's

McDonald’s Corporation (McDonald’s) operates and franchises McDonald’s restaurants. The Company’s restaurants serve a locally relevant menu of food and drinks sold at various price points in over 100 countries. The Company’s segments include U.S., International Lead Markets, High Growth Markets, and Foundational Markets and Corporate.

Analyst Recommendations for McDonald's (NYSE:MCD)

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