Traders Buy High Volume of Call Options on McDonald’s (NYSE:MCD)

McDonald’s Corporation (NYSE:MCD) saw unusually large options trading activity on Friday. Stock investors purchased 34,703 call options on the stock. This is an increase of approximately 34% compared to the average daily volume of 25,879 call options.

McDonald’s Trading Up 1.5%

Shares of NYSE MCD traded up $4.02 during mid-day trading on Friday, hitting $264.08. The company had a trading volume of 2,333,588 shares, compared to its average volume of 3,910,936. The firm has a 50-day simple moving average of $270.95 and a two-hundred day simple moving average of $291.90. The company has a market capitalization of $186.87 billion, a PE ratio of 21.45, a price-to-earnings-growth ratio of 2.99 and a beta of 0.41. McDonald’s has a one year low of $259.85 and a one year high of $341.75.

McDonald’s (NYSE:MCD) last released its earnings results on Tuesday, August 4th. The fast-food giant reported $3.38 earnings per share (EPS) for the quarter, topping the consensus estimate of $3.32 by $0.06. The business had revenue of $7.10 billion for the quarter, compared to analyst estimates of $7.13 billion. McDonald’s had a negative return on equity of 572.06% and a net margin of 31.72%.McDonald’s’s revenue was up 3.7% on a year-over-year basis. During the same quarter in the prior year, the company posted $3.19 earnings per share. Sell-side analysts expect that McDonald’s will post 12.87 earnings per share for the current fiscal year.

McDonald’s Announces Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Wednesday, September 16th. Stockholders of record on Tuesday, September 1st will be paid a dividend of $1.86 per share. The ex-dividend date is Tuesday, September 1st. This represents a $7.44 dividend on an annualized basis and a dividend yield of 2.8%. McDonald’s’s dividend payout ratio is currently 60.44%.

Key Stories Impacting McDonald’s

Here are the key news stories impacting McDonald’s this week:

• Positive Sentiment: Unusual options activity provided a bullish trading signal: investors purchased 34,703 MCD call options, approximately 34% above typical call volume. This may reflect increased expectations for a rebound, though options activity does not guarantee sustained buying.
• Positive Sentiment: McDonald’s is bringing back a popular limited-time menu offering next week, adding a potential near-term traffic and sales catalyst. McDonald’s is bringing back a popular limited-time menu offering next week
• Positive Sentiment: The return of Spicy McNuggets on September 1 after a two-year absence, along with the reintroduction of another discontinued snack, could boost customer engagement and limited-time promotion sales. McDonald’s to bring back spicy McNuggets
• Neutral Sentiment: A report described a modest bid for burger stocks and raised the possibility that elevated short interest could contribute to a squeeze, but it provided no specific fundamental change for MCD. Wendy’s Climbs 4%, McDonald’s Ticks Up
• Neutral Sentiment: Positive consumer-survey results for McDonald’s fries and upcoming fall coffee promotions support brand engagement, but these lifestyle developments are unlikely to materially change near-term earnings expectations. Survey reveals McDonald’s French fries are America’s favorite
• Negative Sentiment: Argus lowered its price target for MCD to $310, a negative revision that signals reduced conviction despite the target remaining above the current share price. Argus Lowers McDonald’s Price Target
• Negative Sentiment: McDonald’s weakened alongside other burger stocks after takeover speculation surrounding Wendy’s faded, showing that sector sentiment and deal-related trading remain short-term headwinds. Wendy’s Sinks as Trian Shelves Its Take-Private Bid

Insider Activity

In related news, insider Joseph M. Erlinger sold 5,252 shares of the firm’s stock in a transaction on Wednesday, June 10th. The shares were sold at an average price of $284.32, for a total transaction of $1,493,248.64. Following the sale, the insider directly owned 7,734 shares in the company, valued at $2,198,930.88. This trade represents a 40.44% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available at this hyperlink. 0.26% of the stock is owned by corporate insiders.

Hedge Funds Weigh In On McDonald’s

Hedge funds and other institutional investors have recently made changes to their positions in the company. California State Teachers Retirement System increased its stake in shares of McDonald’s by 27,036.7% during the 2nd quarter. California State Teachers Retirement System now owns 302,891,546 shares of the fast-food giant’s stock worth $81,874,614,000 after purchasing an additional 301,775,375 shares during the last quarter. Norges Bank bought a new position in McDonald’s during the fourth quarter worth about $2,890,438,000. Bank of New York Mellon Corp bought a new position in McDonald’s during the second quarter worth about $1,359,276,000. Diamant Asset Management Inc. increased its position in McDonald’s by 30,979.0% during the first quarter. Diamant Asset Management Inc. now owns 2,596,340 shares of the fast-food giant’s stock worth $806,917,000 after buying an additional 2,587,986 shares during the last quarter. Finally, J. Stern & Co. LLP raised its stake in McDonald’s by 9,867.5% in the fourth quarter. J. Stern & Co. LLP now owns 2,541,008 shares of the fast-food giant’s stock valued at $776,608,000 after buying an additional 2,515,515 shares during the period. 70.29% of the stock is owned by institutional investors.

Wall Street Analyst Weigh In

A number of equities analysts have issued reports on the company. Freedom Capital upgraded McDonald’s from a “hold” rating to a “strong-buy” rating in a report on Wednesday, August 5th. BTIG Research restated a “buy” rating and issued a $350.00 price target on shares of McDonald’s in a report on Wednesday, August 5th. Guggenheim reduced their price objective on McDonald’s from $320.00 to $290.00 and set a “neutral” rating for the company in a research report on Wednesday, August 5th. Deutsche Bank Aktiengesellschaft increased their price objective on McDonald’s from $335.00 to $345.00 and gave the stock a “buy” rating in a report on Wednesday, August 5th. Finally, Mizuho lowered their price objective on shares of McDonald’s from $300.00 to $290.00 and set a “neutral” rating on the stock in a report on Friday, July 31st. One research analyst has rated the stock with a Strong Buy rating, fifteen have assigned a Buy rating and eleven have issued a Hold rating to the company. Based on data from MarketBeat, the company presently has an average rating of “Moderate Buy” and a consensus price target of $322.96.

About McDonald’s

McDonald’s Corporation (NYSE: MCD) is a global quick-service restaurant company best known for its hamburgers, French fries and breakfast offerings. The company develops, operates and franchises a system of restaurants that sell a range of food and beverage items, including signature products such as the Big Mac, Quarter Pounder, Chicken McNuggets, McCafé coffee beverages and a variety of salads, desserts and seasonal menu items. McDonald’s serves customers through company-operated restaurants and franchised locations, and it supports sales via dine-in, drive-thru, digital ordering platforms and third-party delivery partnerships.

Founded in 1940 by brothers Richard and Maurice McDonald as a single San Bernardino, California restaurant, the business was transformed into a franchising model after Ray Kroc joined in the mid-1950s and led the brand’s national and international expansion.