Baird Financial Group Inc. has reduced its stake in McDonald’s Corporation (NYSE: MCD) by 4.3% during the first quarter of 2023, as disclosed in its latest 13F filing with the Securities and Exchange Commission. Following the sale of 24,193 shares, Baird now holds 542,628 shares valued at approximately $169.5 million, representing about 0.08% of the fast-food giant.
This adjustment in holdings comes as several other investment firms have also shifted their positions in McDonald’s. Notably, Nuveen LLC entered a new stake in the company, valued at around $1.32 billion. Meanwhile, GAMMA Investing LLC significantly increased its holdings by an impressive 39,039.7%, now owning 3,497,919 shares worth about $1.09 billion after acquiring an additional 3,488,982 shares.
Price T Rowe Associates Inc. boosted its stake by 16.8%, bringing its total to 9,341,460 shares valued at approximately $2.92 billion. Goldman Sachs Group Inc. also raised its holdings by 19.6%, now controlling 4,982,825 shares worth $1.56 billion. Altogether, institutional investors and hedge funds collectively own 70.29% of McDonald’s stock.
Insider Transactions and Stock Performance
In related news, insider trading activity has been notable. On August 19, 2023, Executive Vice President Jonathan Banner sold 1,000 shares at an average price of $310.00, totaling $310,000. This sale decreased his ownership in the company by 90.99%, leaving him with just 99 shares valued at approximately $30,690. Similarly, Chief Marketing Officer Edith Morgan Flatley sold 1,000 shares on July 10, 2023, for $300,000, reducing her stake by 10.14% to 8,858 shares valued at $2.66 million. Over the past three months, insiders have sold a total of 7,341 shares worth $2.23 million, with corporate insiders currently holding 0.25% of the company’s stock.
McDonald’s released its quarterly earnings results on August 6, 2023, reporting earnings per share of $3.19, which exceeded analysts’ expectations of $3.15. The company’s revenue for the quarter reached $6.84 billion, surpassing the consensus estimate of $6.68 billion. Year-over-year, revenue increased by 5.4%, while the previous year’s earnings per share stood at $2.97.
Dividend Announcement and Analyst Ratings
The company has also declared a quarterly dividend of $1.77 per share, set to be paid on September 16, 2023. Shareholders on record as of September 2, 2023, will be eligible for this dividend, which translates to an annualized amount of $7.08 and a yield of 2.3%. The current dividend payout ratio for McDonald’s is 60.67%.
In light of recent performance, analysts have updated their ratings for McDonald’s stock. Northcoast Research downgraded the stock from a “buy” to a “neutral” rating in May 2023. Conversely, Evercore ISI raised its price target from $350.00 to $360.00 and maintained an “outperform” rating. Goldman Sachs upgraded McDonald’s from “neutral” to “buy,” setting a price target of $345.00. Meanwhile, BMO Capital Markets reaffirmed an “outperform” rating with an increased price target of $350.00.
Currently, thirteen analysts rate McDonald’s stock as a “buy,” while fourteen maintain a “hold” rating, and two suggest a “sell.” The average target price for the stock stands at $326.38, according to data from MarketBeat.
McDonald’s operates through various segments, including U.S., International Operated Markets, and International Developmental Licensed Markets. The U.S. segment focuses its operations within the United States, while the International Operated Markets segment encompasses operations in countries such as Australia, Canada, France, Germany, Italy, the Netherlands, Spain, and the United Kingdom.
