Traders Buy High Volume of McDonald’s Call Options (NYSE:MCD)

McDonald’s Corporation (NYSE:MCD) was the recipient of some unusual options trading on Friday. Investors purchased 32,245 call options on the company. This is an increase of 45% compared to the average daily volume of 22,241 call options.

Insider Transactions at McDonald’s

In related news, insider Joseph M. Erlinger sold 5,252 shares of the firm’s stock in a transaction dated Wednesday, June 10th. The stock was sold at an average price of $284.32, for a total transaction of $1,493,248.64. Following the transaction, the insider owned 7,734 shares of the company’s stock, valued at $2,198,930.88. This trade represents a 40.44% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is available through this link. Also, EVP Desiree Ralls-Morrison sold 2,763 shares of McDonald’s stock in a transaction that occurred on Thursday, May 28th. The shares were sold at an average price of $278.36, for a total value of $769,108.68. Following the completion of the transaction, the executive vice president owned 6,268 shares in the company, valued at $1,744,760.48. This trade represents a 30.59% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Over the last three months, insiders sold 8,348 shares of company stock valued at $2,355,634. Insiders own 0.26% of the company’s stock.

Hedge Funds Weigh In On McDonald’s

Hedge funds have recently made changes to their positions in the stock. Your Advocates Ltd. LLP acquired a new stake in McDonald’s in the fourth quarter valued at $27,000. IFC & Insurance Marketing Inc. bought a new stake in shares of McDonald’s in the 4th quarter worth about $29,000. Abound Financial LLC bought a new stake in shares of McDonald’s in the 4th quarter worth about $30,000. Purpose Unlimited Inc. bought a new stake in shares of McDonald’s in the 4th quarter worth about $31,000. Finally, DecisionPoint Financial LLC raised its stake in shares of McDonald’s by 1,616.7% in the 4th quarter. DecisionPoint Financial LLC now owns 103 shares of the fast-food giant’s stock valued at $31,000 after purchasing an additional 97 shares in the last quarter. Institutional investors and hedge funds own 70.29% of the company’s stock.

Key Headlines Impacting McDonald’s

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

• Positive Sentiment: McDonald’s declared a quarterly dividend of $1.86 per share, payable September 16 to shareholders of record September 1. The continued dividend supports the stock’s appeal to income-oriented investors. Dividend Strength and Softer Sales Expectations
• Positive Sentiment: Technical analyst Jay Woods said McDonald’s chart is beginning to point toward a potential buy signal, offering a counterpoint to the stock’s prolonged weakness. McDonald’s Charts May Signal a Buy
• Neutral Sentiment: McDonald’s is preparing to report second-quarter results, with investors watching value meals, menu innovation, digital promotions, same-store sales, traffic and profitability. The earnings release is likely to be the main near-term catalyst. Q2 Earnings Factors to Watch
• Neutral Sentiment: Analysts maintain a consensus “Moderate Buy” view, indicating that McDonald’s brand strength and global scale continue to attract long-term support despite recent pressure. Consensus Moderate Buy Rating
• Negative Sentiment: Mizuho lowered its price target from $300 to $290 and assigned a neutral rating. The reduced target reflects more limited expected upside and adds to caution ahead of earnings. Mizuho Lowers McDonald’s Price Target
• Negative Sentiment: Analysts are becoming more cautious about same-store-sales growth, particularly as lower-income consumers face pressure. Reports also highlight the possibility of weaker earnings, while technical data show MCD below its 200-week moving average for its longest stretch since 2003. Erste Group Forecasts Weaker Earnings

McDonald’s Stock Performance

MCD stock traded up $2.40 during trading on Friday, hitting $270.83. The stock had a trading volume of 2,702,889 shares, compared to its average volume of 3,825,945. The stock has a market cap of $192.43 billion, a price-to-earnings ratio of 22.29, a price-to-earnings-growth ratio of 2.92 and a beta of 0.41. The company’s 50 day moving average price is $275.11 and its two-hundred day moving average price is $297.88. McDonald’s has a 1-year low of $260.96 and a 1-year high of $341.75.

McDonald’s (NYSE:MCD) last released its earnings results on Thursday, May 7th. The fast-food giant reported $2.83 EPS for the quarter, topping the consensus estimate of $2.74 by $0.09. McDonald’s had a net margin of 31.62% and a negative return on equity of 442.10%. The firm had revenue of $6.52 billion during the quarter, compared to analysts’ expectations of $6.47 billion. During the same period in the previous year, the company earned $2.67 EPS. McDonald’s’s revenue for the quarter was up 9.4% on a year-over-year basis. As a group, sell-side analysts forecast that McDonald’s will post 12.86 earnings per share for the current fiscal year.

McDonald’s Dividend Announcement

The business also recently announced a quarterly dividend, which will be paid on Wednesday, September 16th. Investors of record on Tuesday, September 1st will be given a $1.86 dividend. The ex-dividend date of this dividend is Tuesday, September 1st. This represents a $7.44 annualized dividend and a dividend yield of 2.7%. McDonald’s’s dividend payout ratio (DPR) is currently 61.34%.

Analysts Set New Price Targets

Several research analysts have issued reports on MCD shares. JPMorgan Chase & Co. cut their price objective on McDonald’s from $325.00 to $305.00 and set an “overweight” rating for the company in a research report on Monday, May 11th. Weiss Ratings lowered shares of McDonald’s from a “hold (c+)” rating to a “hold (c)” rating in a research report on Tuesday, June 23rd. Sanford C. Bernstein reaffirmed a “market perform” rating on shares of McDonald’s in a research note on Monday, June 22nd. Cfra upgraded shares of McDonald’s to a “buy” rating in a report on Friday, May 8th. Finally, Morgan Stanley reduced their price objective on shares of McDonald’s from $331.00 to $322.00 and set an “equal weight” rating for the company in a research note on Wednesday, July 15th. Fifteen investment analysts have rated the stock with a Buy rating and twelve have issued a Hold rating to the company’s stock. According to data from MarketBeat.com, McDonald’s presently has an average rating of “Moderate Buy” and a consensus target price of $331.92.

McDonald’s Company Profile

McDonald’s Corporation (NYSE: MCD) is a global quick-service restaurant company best known for its hamburgers, French fries and breakfast offerings. The company develops, operates and franchises a system of restaurants that sell a range of food and beverage items, including signature products such as the Big Mac, Quarter Pounder, Chicken McNuggets, McCafé coffee beverages and a variety of salads, desserts and seasonal menu items. McDonald’s serves customers through company-operated restaurants and franchised locations, and it supports sales via dine-in, drive-thru, digital ordering platforms and third-party delivery partnerships.

Founded in 1940 by brothers Richard and Maurice McDonald as a single San Bernardino, California restaurant, the business was transformed into a franchising model after Ray Kroc joined in the mid-1950s and led the brand’s national and international expansion.