Analysts’ ratings

Of the 31 analysts that follow McDonald’s (MCD), 64.5% have given it “buys” as of September 7, while the remaining 35.5% have given it “holds.” No analysts have given the stock “sell” recommendations.

As of the same day, analysts have an average price target of $183.46 on the stock, which represents a return potential of 11.9% from its current price of $163.90.

Analysts Favor ‘Buy’ Ratings for McDonald’s

Since the announcement of McDonald’s second-quarter earnings on July 26, Cowen and Company, Jefferies, SunTrust Robinson, Telsey Advisory Group, Canaccord Genuity, and Citigroup have all cut their price targets on its stock. Cowen and Company has lowered its price target from $195 to $190, Jefferies has cut its price target from $200 to $190, and Citigroup has lowered its price target from $178 to $171.

The company’s lower-than-expected SSSG (same-store sales growth) in the United States and the fall in its global guest count during the quarter appear to have compelled analysts to lower their price targets.

Peer comparison

The price targets and return potentials of McDonald’s peers are as follows:

  • Starbucks (SBUX): Of the 32 analysts that follow Starbucks, 46.9% have given it “buys,” and the remaining 53.1% have given it “holds.” On average, analysts have given the stock a price target of $57.88, which represents a return potential of 5.5%.
  • Wendy’s (WEN): Of the 23 analysts that follow Wendy’s, 60.9% have given it “buys,” and the remaining 39.1% have given it “holds.” On average, analysts have given the stock a price target of $19.86, which represents a return potential of 11.0%.
  • Jack in the Box (JACK): Of the 17 analysts that follow Jack in the Box, 47.1% have given it “buys,” and the remaining 52.9% have given it “holds.” On average, analysts have given the stock a price target of $99.86, which represents a return potential of 14.3%.

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