McDonald’s Target of Unusually High Options Trading (NYSE:MCD)

McDonald’s Corporation (NYSE:MCD) was the recipient of unusually large options trading activity on Friday. Traders bought 32,245 call options on the company. This is an increase of approximately 45% compared to the typical volume of 22,241 call options.

McDonald’s Stock Performance

MCD stock opened at $270.83 on Friday. The company has a market capitalization of $192.43 billion, a P/E ratio of 22.33, a PEG ratio of 2.91 and a beta of 0.41. The company has a fifty day moving average price of $274.88 and a 200-day moving average price of $297.69. McDonald’s has a 52-week low of $260.96 and a 52-week high of $341.75.

McDonald’s (NYSE:MCD) last issued its quarterly earnings data on Thursday, May 7th. The fast-food giant reported $2.83 earnings per share for the quarter, topping the consensus estimate of $2.74 by $0.09. The company had revenue of $6.52 billion for the quarter, compared to analysts’ expectations of $6.47 billion. McDonald’s had a net margin of 31.62% and a negative return on equity of 442.10%. McDonald’s’s revenue for the quarter was up 9.4% on a year-over-year basis. During the same quarter in the previous year, the firm posted $2.67 earnings per share. 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 declared a quarterly dividend, which will be paid on Wednesday, September 16th. Shareholders of record on Tuesday, September 1st will be given a $1.86 dividend. This represents a $7.44 dividend on an annualized basis and a dividend yield of 2.7%. The ex-dividend date is Tuesday, September 1st. McDonald’s’s payout ratio is 61.34%.

More McDonald’s News

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

• Positive Sentiment: Unusually heavy call-option activity suggests some traders are positioning for upside. Investors purchased 32,245 calls, approximately 45% above the average volume of 22,241 calls.
• Positive Sentiment: Technical analyst Jay Woods said McDonald’s chart is beginning to form a potential buy signal, which could attract bargain hunters after the stock’s recent correction. CNBC article
• Positive Sentiment: McDonald’s continues to appeal to income-focused investors after declaring a quarterly dividend of $1.86 per share. Analysts also maintain a consensus “moderate buy” recommendation. Dividend strength and softer sales expectations Consensus recommendation
• Neutral Sentiment: Investors are focused on value meals, menu innovation, digital promotions, same-store sales, margins and management’s outlook when McDonald’s reports second-quarter results. Q2 earnings factors
• Negative Sentiment: Mizuho lowered its price target from $300 to $290 and assigned a “neutral” rating, signaling limited conviction despite implied upside from current levels.
• Negative Sentiment: The stock has remained below its 200-week moving average for the longest stretch since 2003, highlighting persistent technical weakness. Barchart technical analysis
• Negative Sentiment: Analysts expect softer sales and weaker earnings, particularly as lower-income consumers remain pressured. That caution could limit gains before the earnings release. McDonald’s stock ahead of August 4 earnings

Analyst Ratings Changes

Several research analysts have recently issued reports on the stock. Royal Bank Of Canada reiterated a “sector perform” rating on shares of McDonald’s in a report on Tuesday. UBS Group cut their price objective on McDonald’s from $365.00 to $340.00 and set a “buy” rating on the stock in a report on Monday, July 27th. Robert W. Baird set a $305.00 price objective on McDonald’s in a research report on Thursday, May 7th. Citigroup dropped their target price on McDonald’s from $375.00 to $335.00 and set a “buy” rating for the company in a research report on Wednesday, July 15th. Finally, JPMorgan Chase & Co. cut their price target on McDonald’s from $325.00 to $305.00 and set an “overweight” rating on the stock in a research note on Monday, May 11th. Fifteen research analysts have rated the stock with a Buy rating and twelve have assigned a Hold rating to the stock. According to MarketBeat, McDonald’s presently has a consensus rating of “Moderate Buy” and an average target price of $331.92.

Insider Buying and Selling

In related news, EVP Desiree Ralls-Morrison sold 2,763 shares of the company’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 transaction of $769,108.68. Following the completion of the transaction, the executive vice president directly owned 6,268 shares in the company, valued at $1,744,760.48. This represents a 30.59% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through this hyperlink. Also, insider Joseph M. Erlinger sold 5,252 shares of the stock in a transaction that occurred on Wednesday, June 10th. The shares were sold at an average price of $284.32, for a total transaction of $1,493,248.64. Following the completion of the transaction, the insider directly owned 7,734 shares of the company’s stock, valued at approximately $2,198,930.88. The trade was a 40.44% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Over the last 90 days, insiders sold 8,348 shares of company stock worth $2,355,634. 0.26% of the stock is currently owned by corporate insiders.

Institutional Investors Weigh In On McDonald’s

Several institutional investors and hedge funds have recently made changes to their positions in the stock. Brighton Jones LLC increased its position in shares of McDonald’s by 21.6% during the fourth quarter. Brighton Jones LLC now owns 9,286 shares of the fast-food giant’s stock worth $2,692,000 after buying an additional 1,649 shares during the period. Revolve Wealth Partners LLC lifted its holdings in McDonald’s by 2.8% in the fourth quarter. Revolve Wealth Partners LLC now owns 1,942 shares of the fast-food giant’s stock valued at $563,000 after buying an additional 52 shares during the period. Sivia Capital Partners LLC lifted its holdings in McDonald’s by 11.4% in the second quarter. Sivia Capital Partners LLC now owns 2,017 shares of the fast-food giant’s stock valued at $589,000 after buying an additional 206 shares during the period. United Bank boosted its position in McDonald’s by 6.0% during the second quarter. United Bank now owns 8,102 shares of the fast-food giant’s stock valued at $2,367,000 after acquiring an additional 459 shares during the last quarter. Finally, Schnieders Capital Management LLC. grew its holdings in McDonald’s by 2.5% during the 2nd quarter. Schnieders Capital Management LLC. now owns 12,938 shares of the fast-food giant’s stock worth $3,780,000 after acquiring an additional 312 shares during the period. Institutional investors and hedge funds own 70.29% of the company’s stock.

About McDonald’s

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.