What Are The Risk Factors For McDonald’s Corporation (MCD)?

As of Friday close, McDonald’s Corporation’s (NYSE:MCD) stock was down -$1.41, moving down -0.54 percent to $259.23. The average number of shares traded per day over the past five days has been 2,194,500 shares. 1 time new highs have been achieved over the past 5 days, with a -$4.14 fall in that time frame. In the last twenty days, the average volume was 2,446,660, while in the previous 50 days, it was 2,621,678.

Since last month, MCD stock rose 2.49%. Shares of the company fell to $248.26 on 07/13/22, the lowest level in the past month. A 52-week high of $271.15 was reached on 01/04/22 after having rallying from a 52-week low of $217.68. Since the beginning of this year, MCD’s stock price has dropped by -3.30% or -$8.84, and marked a new high 2 times. However, the stock has declined by -4.40% since its 52-week high.

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McDonald’s Corporation (MCD) last reported insider trading activity 5 days ago on Aug 01. Borden Ian Frederick, the President, International of the company, disposed of 5,320 shares for $265.00 on Aug 01. It resulted in a $1,409,800 divestment by the insider. HERNANDEZ ENRIQUE JR sold 4,500 shares at an average price of $264.02 on Jul 29. The insider now owns 0 shares following the transaction. On Jul 27, SVP – Corporate Controller Hoovel Catherine A. sold 2,371 shares at $255.62 apiece. The transaction was valued at $606,075.

Valuation Metrics

The latest dividend of $1.38 per share was paid out, remained unchanged from last year’s $1.38. On Thursday September 23 2021, a $0.09 dividend increase was announced.

Financial Health

In the three months ended June 29, McDonald’s Corporation’s quick ratio stood at 1.10, while its current ratio was 1.10, showing that the company is able to pay off its debt. On the profitability front, the trailing twelve-month gross margin is 55.30% percent. In the year ended June 29, operating margins totaled 43.90%. Based on annual data, MCD earned $12.58 billion in gross profit and brought in $23.22 billion in revenue.

A company’s management is another factor that investors consider when determining the profitability of an investment. In the past year, return on investment (ROI) was 28.30%. Return on equity (ROE) for the past 12 months was -136.70%.

In McDonald’s Corporation’s quarter-end financial report for June 29, it reported total debt of $33.99 billion. According to the earnings report, the company had a higher net income in the recent quarter than it did in the previous quarter. MCD’s revenue rose 9.55% to $6.01 billion during the quarter, while net income inched up to $5.67 billion. While analysts expected McDonald’s Corporation to report $2.47 quarterly earnings, the actual figure was $2.55 per share, beating the consensus estimate by 3.20%. During the quarter, the company generated $2.17 billion in EBITDA. The liabilities of McDonald’s Corporation were 55.62 billion at the end of its most recent quarter ended June 29, and its total debt was $47.59 billion. The value of shareholders’ equity is $735.72 million.

Technical Picture

This quick technical analysis looks at McDonald’s Corporation’s (MCD) price momentum. With a historical volatility rate of 17.69%, the RSI 9-day stood at 54.11% on 05 August.

With respect to its five-day moving average, the current McDonald’s Corporation price is down by -1.57% percent or -$4.14. At present, MCD shares trade +2.37% above its 20-day simple moving average and +14.61% percent above its 100-day simple moving average. However, the stock is currently trading approximately +6.02% above its SMA50 and +6.78% above its SMA200.

Stochastic coefficient K was 71.40% and Stochastic coefficient D was 76.20%, while ATR was 4.19. Given the Stochastic reading of 62.93% for the 14-day period, the RSI (14) reading has been calculated as 56.63%. As of today, the MACD Oscillator reading stands at -0.46, while the 14-day reading stands at 2.16.

Analyst Ratings

Truist reiterated its a Buy rating on McDonald’s Corporation (NYSE: MCD) in a note to investors. The analysts firm has however raised their price target to $276, representing a possible 5.04% increase in the stock price. McDonald’s Corporation (MCD) has been rated Overweight by analysts. According to 0 brokerage firms, MCD is a sell, and 9 firms recommend it is a Hold. There are 1 analyst who say the stock is underweight. A total of 4 analysts rate McDonald’s Corporation stock as buy, with 20 recommending it as overweight.

With a median target price of $285.00, the current consensus forecast for the stock is $245.00 – $328.00. Based on these forecasts, analysts predict McDonald’s Corporation (MCD) will achieve an average price target of $281.29.


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