McDonald’s (NYSE:MCD) Stock Jumps 1.6% – Should You Buy?

McDonald’s Corporation (NYSE:MCD)’s share price rose 1.6% during trading on Tuesday. The company traded as high as $247.29 and last traded at $246.4710. 5,429,495 shares traded hands during trading, an increase of 27% from the average daily volume of 4,272,530 shares. The stock had previously closed at $242.67.

Trending Headlines about McDonald’s

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

• Positive Sentiment: McDonald’s valuation has become more attractive after its recent decline. Trefis notes that the shares trade at roughly 19.6–19.7 times trailing earnings, below the company’s three-year average and at one of the lowest quarter-end multiples in a decade. A partial recovery in the earnings multiple could provide upside if growth improves. Is the Market Underpricing McDonald’s Stock?
• Positive Sentiment: Analysts remain constructive on McDonald’s longer-term strategy. UBS believes the NEXT growth plan and renewed value offerings could outweigh near-term U.S. weakness and help the company gain global market share in 2027. McDonald’s NEXT Plan and Value Push
• Positive Sentiment: Several articles highlight McDonald’s dependable franchise model, elevated dividend yield and long record of dividend increases. That income appeal may support demand for the stock, particularly while its valuation remains depressed. Reasons to Own McDonald’s Stock
• Neutral Sentiment: New products, Disney-themed Happy Meal promotions and Halloween Boo Buckets could support traffic and customer engagement, but the coverage provides no evidence yet of a material sales or earnings impact. McDonald’s New Chicken Product
• Negative Sentiment: Morgan Stanley flagged a pricing-power problem as lower-income customers reduce spending, raising concerns about comparable-sales growth, margins and the effectiveness of further price increases. McDonald’s Pricing-Power Problem
• Negative Sentiment: Investors are also looking ahead to third-quarter earnings, while reports of alleged menu-pricing practices and a reduced position by Cordatus Wealth Management add smaller sources of uncertainty. Alleged Menu Pricing Scheme

Analyst Upgrades and Downgrades

Several research firms have recently commented on MCD. Melius Research reduced their target price on shares of McDonald’s from $250.00 to $230.00 and set a “sell” rating for the company in a research note on Monday, September 28th. HSBC dropped their price target on shares of McDonald’s from $357.00 to $356.00 and set a “buy” rating on the stock in a research note on Wednesday, August 5th. Evercore cut their price target on shares of McDonald’s from $320.00 to $300.00 and set an “outperform” rating for the company in a report on Thursday, September 24th. JPMorgan Chase & Co. reduced their price objective on shares of McDonald’s from $280.00 to $260.00 and set an “overweight” rating for the company in a research report on Thursday, September 24th. Finally, Oppenheimer reduced their price objective on shares of McDonald’s from $325.00 to $295.00 and set an “outperform” rating for the company in a research report on Thursday, September 24th. One investment analyst has rated the stock with a Strong Buy rating, twenty-two have assigned a Buy rating, thirteen have assigned a Hold rating and one has given a Sell rating to the stock. According to MarketBeat, the stock has a consensus rating of “Moderate Buy” and a consensus target price of $295.64.

McDonald’s Price Performance

The firm’s 50-day simple moving average is $251.44 and its two-hundred day simple moving average is $271.35. The company has a market capitalization of $174.41 billion, a price-to-earnings ratio of 20.02, a price-to-earnings-growth ratio of 2.72 and a beta of 0.44.

McDonald’s (NYSE:MCD) last issued its earnings results on Tuesday, August 4th. The fast-food giant reported $3.38 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $3.32 by $0.06. The company had revenue of $7.10 billion during the quarter, compared to analysts’ expectations of $7.13 billion. McDonald’s had a net margin of 31.72% and a negative return on equity of 572.06%. The firm’s quarterly revenue was up 3.7% compared to the same quarter last year. During the same period last year, the company posted $3.19 earnings per share. On average, analysts expect that McDonald’s Corporation will post 12.84 EPS for the current fiscal year.

McDonald’s Increases Dividend

The company also recently declared a quarterly dividend, which will be paid on Tuesday, December 15th. Stockholders of record on Tuesday, December 1st will be paid a dividend of $1.93 per share. This is a boost from McDonald’s’s previous quarterly dividend of $1.86. The ex-dividend date of this dividend is Tuesday, December 1st. This represents a $7.72 annualized dividend and a dividend yield of 3.1%. McDonald’s’s dividend payout ratio is presently 60.44%.

Institutional Investors Weigh In On McDonald’s

Several institutional investors and hedge funds have recently made changes to their positions in MCD. State Street Corp increased its stake in shares of McDonald’s by 1.8% during the 2nd quarter. State Street Corp now owns 36,080,505 shares of the fast-food giant’s stock worth $9,752,921,000 after purchasing an additional 646,675 shares in the last quarter. Bank of New York Mellon Corp purchased a new stake in McDonald’s in the 2nd quarter valued at approximately $1,359,276,000. Arrowstreet Capital Limited Partnership lifted its stake in McDonald’s by 17.2% in the 1st quarter. Arrowstreet Capital Limited Partnership now owns 3,637,785 shares of the fast-food giant’s stock valued at $1,130,587,000 after buying an additional 533,448 shares in the last quarter. Diamant Asset Management Inc. lifted its stake in McDonald’s by 30,979.0% in the 1st quarter. Diamant Asset Management Inc. now owns 2,596,340 shares of the fast-food giant’s stock valued at $806,917,000 after buying an additional 2,587,986 shares in the last quarter. Finally, Swiss National Bank grew its holdings in McDonald’s by 6.9% during the 1st quarter. Swiss National Bank now owns 2,089,980 shares of the fast-food giant’s stock valued at $649,545,000 after buying an additional 134,480 shares during the last quarter. 70.29% of the stock is currently owned by hedge funds and other 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.