McDonald’s (NYSE:MCD) Shares Up 6.5% on Better-Than-Expected Earnings

Shares of McDonald’s Corporation (NYSE:MCD) traded up 6.5% on Wednesday following a stronger than expected earnings report. The stock traded as high as $281.14 and last traded at $280.2030. Approximately 11,492,042 shares were traded during mid-day trading, an increase of 165% from the average session volume of 4,337,033 shares. The stock had previously closed at $263.04.

The fast-food giant reported $3.57 EPS for the quarter, beating the consensus estimate of $3.38 by $0.19. McDonald’s had a net margin of 31.72% and a negative return on equity of 572.06%. The firm had revenue of $7.16 billion during the quarter, compared to analyst estimates of $7.28 billion. During the same quarter in the prior year, the firm earned $3.22 EPS. The business’s revenue for the quarter was up 1.1% compared to the same quarter last year.

McDonald’s Increases Dividend

The firm also recently declared a quarterly dividend, which will be paid on Tuesday, December 15th. Shareholders of record on Tuesday, December 1st will be issued a dividend of $1.93 per share. This is a boost from McDonald’s’s previous quarterly dividend of $1.86. This represents a $7.72 dividend on an annualized basis and a yield of 2.8%. The ex-dividend date of this dividend is Tuesday, December 1st. McDonald’s’s payout ratio is 60.44%.

Key Stories Impacting McDonald’s

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

• Positive Sentiment: McDonald’s reported adjusted earnings of $3.57 per share, above estimates of about $3.38, with higher franchised margins helping offset soft U.S. sales. International markets provided an important source of growth. The profit beat appears to have outweighed the revenue shortfall in investors’ initial reaction. Article: McDonald’s Q3 Earnings Beat on Franchised Margins, Revenues Miss
• Neutral Sentiment: The company plans to add value-focused meal bundles early next year to attract cost-conscious customers. Their success could help rebuild traffic, though the plans also underscore the challenge of winning back diners without putting pressure on pricing or margins. Article: McDonald’s to add new value bundles next year
• Negative Sentiment: Revenue was $7.16 billion, below the $7.28 billion analyst estimate, while U.S. comparable sales fell 0.2%—their first decline in six quarters. The results point to continued pressure on domestic traffic as consumers contend with the cost of living. Article: McDonald’s US sales decline for first time in six quarters despite value push
• Negative Sentiment: CEO Chris Kempczinski warned that anticipated inflation in 2027 calls for extreme caution on pricing. That could limit McDonald’s ability to pass higher costs on to customers, while further price increases risk worsening affordability concerns. Article: McDonald’s CEO Sounds Alarm on 2027 Inflation, Says Pricing Requires Extreme Caution

Analyst Ratings Changes

Several brokerages have commented on MCD. TD Cowen boosted their price target on shares of McDonald’s from $270.00 to $285.00 and gave the stock a “hold” rating in a research note on Wednesday. Mizuho reduced their price objective on McDonald’s from $290.00 to $260.00 and set a “neutral” rating on the stock in a research note on Friday, October 30th. Gordon Haskett decreased their price objective on McDonald’s from $315.00 to $285.00 and set a “buy” rating on the stock in a report on Thursday, September 24th. KeyCorp lowered their target price on McDonald’s from $305.00 to $280.00 and set an “overweight” rating for the company in a research report on Tuesday, October 6th. Finally, Morgan Stanley lowered their target price on McDonald’s from $308.00 to $297.00 and set an “equal weight” rating for the company in a research report on Monday, September 28th. One equities research analyst has rated the stock with a Strong Buy rating, twenty-two have issued a Buy rating, thirteen have assigned a Hold rating and one has given a Sell rating to the stock. According to MarketBeat, McDonald’s presently has an average rating of “Moderate Buy” and a consensus target price of $293.21.

Institutional Trading of McDonald’s

A number of hedge funds and other institutional investors have recently bought and sold shares of MCD. Texas Bank & Trust Co lifted its holdings in McDonald’s by 3.8% in the 3rd quarter. Texas Bank & Trust Co now owns 11,603 shares of the fast-food giant’s stock worth $2,680,000 after buying an additional 422 shares during the period. Vestor Capital LLC increased its stake in shares of McDonald’s by 365,540.7% during the third quarter. Vestor Capital LLC now owns 98,723 shares of the fast-food giant’s stock valued at $22,799,000 after buying an additional 98,696 shares during the period. AlphaCore Capital LLC increased its stake in shares of McDonald’s by 0.9% during the third quarter. AlphaCore Capital LLC now owns 19,788 shares of the fast-food giant’s stock valued at $4,570,000 after buying an additional 181 shares during the period. Fulcrum Asset Management LLP raised its holdings in shares of McDonald’s by 133.2% during the third quarter. Fulcrum Asset Management LLP now owns 8,170 shares of the fast-food giant’s stock valued at $1,912,000 after acquiring an additional 4,667 shares in the last quarter. Finally, Allspring Global Investments Holdings LLC raised its holdings in shares of McDonald’s by 4.5% during the third quarter. Allspring Global Investments Holdings LLC now owns 196,396 shares of the fast-food giant’s stock valued at $45,531,000 after acquiring an additional 8,482 shares in the last quarter. Hedge funds and other institutional investors own 70.29% of the company’s stock.

McDonald’s Stock Up 6.5%

The business has a fifty day moving average of $247.96 and a 200 day moving average of $282.99. The company has a market cap of $198.28 billion, a P/E ratio of 22.76, a P/E/G ratio of 3.03 and a beta of 0.42.

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.