How to Trade McDonald's After Q4 2023 Performance
Due to the popularity of McDonald's and the key real estate locations it holds, the fast-food chain's performance is often seen as a barometer of economic health. Learn more about McDonald's fiscal fourth-quarter performance and what the analysts are forecasting for the stock.
|Symbol for Invest.MT5 Account:
|Date of Idea:
|6 February 2024
|1 - 6 months
|Position Size for Invest.MT5 Account:
- The Invest.MT5 account allows you to buy real stocks and shares from 15 of the largest stock exchanges in the world.
All trading is high risk and you can lose more than you risk on a trade. Never invest more than you can afford to lose, as some trades will lose and some trades will win. Start small to understand your own risk tolerance levels or practice on a demo account first to build your knowledge before investing.
McDonald's Q4 2023 Performance
Here are some of the key highlights from the latest fourth-quarter earnings report from McDonald's:
- Earnings per share of $2.95 vs $2.82 expected
- Revenue of $6.41 billion vs $6.45 billion expected
- Net income of $2.04 billion up from $1.9 billion a year earlier
- Net sales up 8% to $6.41 billion
- Same-store sales grew 3.4%, lower than the 4.7% expected
On the face of it, McDonald's beat analyst expectations on most metrics including earnings per share and revenue. However, the fast-food chain also reported same-store sales figures lower than analysts were expecting - the first quarterly miss in nearly four years.
The lower sales came from its international business division and the conflict in the Middle East. Western companies such as Starbucks, Coca-Cola and McDonald's have seen boycotts and protests, affecting overall sales.
Global sales in the fourth quarter were up 4%, far lower than the 8.8% in the prior quarter and below its yearly average. Much of the growth has been attributed to higher inflation with the strongest sales in the U.S., followed by the UK and Germany.
There are some clear challenges for McDonald's with the ongoing conflicts around the world. While it plans to open more than 2,100 new locations this year, it will take some time to influence the bottom line. It is one reason that more analysts are shifting to hold ratings on the stock as highlighted below.
McDonald's Stock Forecast - What do the Analysts Say?
According to analysts polled by TipRanks for a McDonald's stock forecast in the past 3 months, there are currently 21 buy, 9 hold and 0 sell ratings on the stock. The highest price level for a McDonald's stock forecast is $357.00 with the lowest price target at $300.00.
The average price target for a McDonald's stock forecast is $323.57.
An Example Trading Idea for the McDonald's Stock Price
An example trading idea for the McDonald's share price could be as follows:
- Buy the stock on a break above the post-earnings high at $292.00 to allow for volatility.
- Target just below the highest analyst price target of $323.00.
- Keep your risk small at a maximum of 5% of your total account.
- Time Line = 1 – 6 months
- If you buy 10 McDonald's shares:
- If target is reached = $310.00 potential profit [($323.00 - $292.00) * 10 shares].
Remember that markets go up and down and it is unlikely the share price will move up in a straight line. In fact, it may even go much further down before it rises, especially considering the uncertain geopolitical climate around the world.
Be sure to exercise good risk management and always know how much you could potentially lose on a trade and the risks involved, as well as the costs.
With the Admirals Invest.MT5 account you can buy and sell US stocks with a commission from $0.02 per share. This means buying 10 shares in McDonald's stock would result in a commission of $0.20 ($0.02 * 10 shares) for executing a per-side transaction.
There is a low minimum transaction fee of $1. So, the example trading idea above would result in a commission of just $1 overall!
How to Buy McDonald's Stock in 4 Steps
With Admirals, you can buy shares in companies like McDonald's with a low commission of just $0.02 per share and a low minimum commission of just $1 on US stocks.
- Open an account with Admirals to access the dashboard.
- Click on Trade on one of your live or demo accounts to open the web platform.
- Search for your stock in the search window at the top right to view the live price chart.
- Click Create New Order from the bottom of the screen to open the trading ticket.
Click on the banner below to trade McDonald's stock today ▼▼▼
Do You See the McDonald's Stock Price Moving Differently?
Remember that all analytics and trading ideas are based on the personal view and experience of the author.
If you believe there is a higher chance McDonald's share price will move lower, then you can also trade short from a CFD (Contracts for Difference) trading account which Admirals also provide.
This means you can trade long and short to potentially profit from rising and falling stock prices.
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