, an analyst from Mizuho Securities, has initiated a new Hold rating on McDonald’s (MCD).
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Mizuho Securities has given its Hold rating due to a combination of factors that reflect both opportunities and challenges for McDonald’s. The report highlights that McDonald’s U.S. sales, which constitute a significant portion of the quick-service restaurant segment, have been impacted by post-COVID price increases that exceeded industry averages, leading to a decline in customer traffic. To address this, McDonald’s has implemented an aggressive value strategy aimed at reversing these traffic trends, although this approach may limit margin visibility in the U.S.
Additionally, Mizuho Securities notes that while McDonald’s international operated markets (IOM) are less exposed to competitive dynamics compared to the U.S., the company’s growth expectations in these regions are largely in line with consensus estimates. The report also points out that the U.S. company-owned portfolio is relatively small in terms of profit contribution, which could influence domestic unit growth strategies. Overall, the Hold rating reflects a balanced view of McDonald’s current valuation, which is seen as appropriately accounting for the company’s long-term growth prospects and the risks associated with its aggressive pricing strategies.
Based on the recent corporate insider activity of 47 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of MCD in relation to earlier this year.