TLDR
- McDonald’s stock has dropped for eight straight weeks, its longest losing streak since the dot-com era.
- Shares hit a fresh 52-week low of $232.05, down about 23% over the past year.
- The stock trades near $232, down roughly 24% so far this year.
- Analysts have cut price targets following the company’s new “NEXT” strategy announcement.
- The $8.5 billion franchisee support plan runs through 2036 and pushes margin targets out to 2030.
McDonald’s (MCD) stock is trading around $232 a share, putting it on track for an eighth straight weekly decline. That’s the longest losing streak for the stock since the dot-com crash more than two decades ago.
Shares touched a fresh 52-week low of $232.05 this week. That’s just above the yearly bottom of $232.06, and a long way from the 52-week high of $341.75.
The stock is down about 23% over the past year. Year to date, it has fallen around 24%.
Over the last five trading days alone, shares slipped close to 2%. Even the five-year picture isn’t pretty, with MCD down roughly 5% over that stretch.
What’s Driving the Decline
Weak U.S. same-store sales are a big part of the story. CEO Chris Kempczinski has also given a cautious outlook for the business going forward.
Investors are also digesting the company’s new “NEXT” strategy. It’s an $8.5 billion franchisee support plan that runs all the way through 2036.
The plan requires heavy spending in the near term. That’s weighing on sentiment, since it pushes the company’s margin targets out to 2030, a long wait for shareholders looking for quicker returns.
Several Wall Street firms have trimmed their price targets since the strategy was unveiled at McDonald’s Investor Day. Morgan Stanley cut its target to $297 and kept an Equalweight rating.
Bernstein SocGen Group held a Market Perform rating with a $295 target. The firm pointed to the size of the investment needed and its effect on near-term earnings.
Baird took a more cautious step, cutting its target to $250 while keeping a Neutral rating. The firm cited ongoing pressure on consumer spending and uncertainty around how the new strategy will play out.
BTIG also lowered its target, moving to $295 while keeping a Buy rating. The firm flagged sales pressure and the scale of the investment costs involved.
RBC Capital trimmed its target to $285, maintaining a Sector Perform rating. That call came after reviewing McDonald’s presentations on growth and margin drivers.
Where Things Stand Now
Not every signal is negative. Some valuation models suggest the stock may be undervalued at current levels, which could appeal to longer-term investors.
Data also shows 13 analysts have revised their earnings estimates downward recently. Despite that, McDonald’s still holds a “GOOD” financial health score by several measures.
The company now carries a market capitalization of around $164 billion. That’s a steep drop from where it stood at its 52-week high.
If shares don’t recover by the end of Friday’s session, the eighth consecutive weekly loss will be locked in. That would mark the stock’s worst stretch in more than 20 years.
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