Trade of the Day: McDonald’s Corporation (MCD) Stock Sizzling Toward $140

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McDonald’s Corporation (NYSE:MCD) — McDonald’s is the largest fast-food restaurant company in the world. It has over 35,000 stores in over 120 countries, competing in an industry where it is the most dominant brand.

It had a decline in revenues in 2015 of 7.4%, a result of foreign currency fluctuations. After third-quarter results, which beat estimates by 14 cents, Standard & Poor’s raised their 2016 EPS estimate to $5.71, up 13 cents, and kept the 2017 estimate at $6.18.

U.S. growth, paced by the “All Day Breakfast,” along with global increases were responsible for Q3’s earnings surprise. S&P’s price target, based on fundamental analysis, is $140, plus a dividend yield of 3.1%.

After trading for almost a year in a tight range of $90 to $100, MCD broke out in October of last year, breaking to a new high at $131.96 in May ‘16. Since then, profit-taking and a host of external global difficulties resulted in a pullback to a support line at $110 in October. The stock successfully tested that low in December, reversing through its 50-day moving average ($114) and continuing through the 200-day moving average at $120 and a test of the bearish resistance line.

On Monday it succeeded in closing above that line and yesterday added 84 cents to the advance. Volume on the rally has registered as “normal,” but MACD issued a new buy signal yesterday, which gives credibility to the advance.

Buy this member “A”-rated member of the Dow-30 at $122 with a price target of $140 for a proposed gain of almost 15%, plus a dividend yield of 3.1%.

MCD Bear Channel Broken
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Trade of the Day: McDonald's Corporation (MCD) Stock Sizzling Toward $140


Article printed from InvestorPlace Media, https://investorplace.com/2016/12/mcdonalds-corporation-mcd-stock-sizzling/.

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