Can McDonald’s (MCD) Stock Can Rally If They Get One Thing Right?

• MCD stock rallied 7.99% YTD and 8.12% in a year but fell 2.62% in a month. 
• If McDonald’s manages to do this one thing right, it can reach new ATH.  

The American fast food giant McDonald’s Corp. (NYSE: MCD) is not performing at par with its competitors. MCD stock gained 7.99% YTD. Despite this lackluster performance, experts think the fast-food icon has been hiding an opportunity to rally hard in plain sight. 

McDonald’s Corp. (MCD) Stock – A Trick Up its Sleeve to Rally Hard

Since the beginning of 2023, MCD’s share price soared over 7% with a dividend yield of 2.11%. Data suggests the reason behind this subpar performance is losing market share rapidly. As per the U.S. Consensus Bureau, McDonald’s owned 9.37% of the American market share while its rival Starbucks (NASDAQ: SBUX) had a market share of 11.91%. 

Analysts say that the fast-food icon’s global comparable sales gained 11.7%, while systemwide sales jumped by 14%. The company’s operating income also reported a massive jump of 81%, despite the rates in the menu being increased and a massive customer influx post-pandemic. 

With rising inflation, customers are getting selective about their spending. It should be noted that they never stop spending; they get selective to find an acceptable price-to-quality equilibrium. With workers getting called back to the office and some other factors, the demand for affordable meals will rise. If McDonald’s manages to cater to this demand, it can rally hard. 

McDonald’s Corp. (NYSE: MCD) – Technical Analysis 

MCD stock, at press time, is trading at $284.58, gaining 0.79%; previous close and open were at $282.35 and $284.76, respectively. The 52-week range is from $230.58 to $299.35, suggesting that the right strategy could create a new high. With a volume of 3.72 Million shares, the market cap is $207.77 Billion. 

The trailing twelve-month (TTM) price-to-earnings (P/E) ratio is 26.23, suggesting a fairly valued stock price. At the same time, the (TTM) earnings per share (EPS) is $10.85, suggesting financial strength. Analysts placed a 2.76 rating for moderate buy and estimated a price target at $320.55 with a 12.7% upside. 

McDonald’s reported Q2 earnings on July 27, 2023, where the reported revenue of $6.498 Billion surpassed the expected value of $6.295 Billion by 3.22%. In comparison, the reported earnings of $3.17 per share exceeded the estimated value of $2.784 per share by 13.85%. Due to these favorable earnings, MCD’s share price gained 3.46% during earnings. 

Compared to the previous quarter, the revenue gained 13.62%, and EOS jumped by 24.31%. The subsequent earnings will be reported on October 24, 2023, where revenue shall be $6.557 Billion and EPS will be $2.99, a noticeable drop from previous estimations. The (TTM) revenue is $24.19 Billion while the year-over-year (YoY) quarterly revenue growth is 13.60%. 

McDonald’s Corp. (MCD) Stock – Candle Exploration

Even if the price shows a pullback from the 200EMA, experts say it could bounce off 50EMA and fall. If so, the fall should rebound from the immediate support at $267.71. If it continues the downtrend, S1 at $260.40 will be a strong support it will kick the price back up. 

The price will have to beat 50EMA and R1 at $300.00 to rally. If the price sustains above 50EMA for a considerable time, it will be strong enough to cross R1. Crossing R2 at $310.00 will have to sustain above R1. As mentioned earlier, it can be rewarding if McDonald’s stock manages to cater to the demand. 

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