/McDonald)
With a market cap of $212.1 billion, McDonald's Corporation (MCD) is a global leader in the fast-food industry, operating and franchising restaurants under its iconic brand in the United States and internationally. Based in Chicago, Illinois, it offers a wide range of food and beverages, generating revenue through company-operated restaurants and franchise fees.
Companies valued at over $200 billion or more are generally considered “mega-cap” stocks and McDonald's fits this criterion perfectly. McDonald's is renowned for its global standardization and adaptability. It offers iconic items like the Big Mac and French fries alongside localized menu variations to cater to regional tastes, while leveraging a highly efficient franchising model and real estate ownership strategy.
However, the fast food giant pulled back 8.1% from its 52-week high of $317.90, recorded on Oct. 21. Shares of McDonald's have risen 1.2% over the past three months, lagging behind the Consumer Discretionary Select Sector SPDR Fund’s (XLY) 19.9% increase over the same time frame.
Longer term, MCD stock is down 1.4% on a YTD basis, underperforming XLY’s 25.4% rise. Moreover, shares of McDonald's have gained 2.2% over the past 52 weeks, compared to XLY’s 31.1% return over the same time frame.
Yet, MCD stock has been trading above its 50-day since late July with recent fluctuations. Also, the stock climbed above its 200-day moving average since mid-August.
McDonald’s reported a strong Q3 performance with an adjusted EPS of $3.23 and revenue of $6.9 billion, surpassing expectations. However, shares dipped slightly on Oct. 29 due to a 1.5% decline in global comparable sales, including a 2.1% drop in the International Operated Markets segment. Analysts noted U.S. growth was primarily driven by higher average checks rather than increased traffic, suggesting weaker demand, while underperformance in key international markets like the Middle East and China raised concerns about global recovery trends.
However, on Nov. 22, the company announced the nationwide launch of its McValue™ platform, set to debut on Jan. 7, 2025, featuring customizable savings like the $5 Meal Deal and the new Buy One, Add One for $1 offer. Customers can enjoy more ways to save with deals on fan favorites for breakfast, lunch, and dinner, as well as exclusive in-app and local discounts.
In comparison, rival Yum! Brands, Inc. (YUM) is outperforming MCD. Shares of Conagra Brands have gained 8.4% over the past 52 weeks and 5.6% on a YTD basis.
Despite MCD’s weak price action, analysts are moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 34 analysts covering the stock, and as of writing, MCD is trading below the mean price target of $323.55.
