What Wall Street Recommends for McDonald’s

As of January 30, McDonald’s (MCD) was trading at $172.48. On the same day, analysts were expecting the company’s stock price to reach $189.32 in the next 12 months, which represents a return potential of 9.8%.

Before the announcement of 4Q17 earnings, analysts forecasted a 12-month target price of $176.21. The strong 4Q17 earnings, and measures undertaken by the company’s management, appear to have compelled analysts to raise their target prices. After the announcement of 4Q17 earnings, Mizuho, which has a “buy” rating on the stock, has raised its target price from $173 to $191. However, Barclays lowered its target price from $205 to $200.

The target price and return potential for McDonald’s peers are as follows.

• Starbucks (SBUX): target price of $64.64 with return potential of 13.0%
• Wendy’s (WEN): target price of $17.67 with return potential of 10.3%
• Jack in the Box (JACK): target price of $110.33 with return potential of 12.0%

Of the 35 analysts who follow McDonald’s, 71.4% are recommending a “buy,” and the remaining 28.6% are recommending a “hold.” No analysts are recommending a “sell.” Currently, McDonald’s is trading below analysts’ 12-months target price.