Corona Virus
Stay Safe, FollowGuidance
Fetching Location Data…
Alan Farley

Dow component McDonald’s Corp. (MCD) has defied the odds in the struggling restaurant sector this week, breaking out above the August 2019 high and posting an all-time high near 225. The company added to gains on Wednesday morning after Business Insider reported that a promotion featuring rapper and singer Travis Scott has caused a shortage of burger ingredients due to overwhelming demand.

McDonald’s New Marketing Initiatives

McDonald’s has started to broaden marketing innovation at restaurants that have now reopened around the world, in an effort to energize already improving monthly sales trends. Current and planned initiatives include broader appeals to Millennials, Generation Z, and ethnic users by featuring more “unique and flavorful meals, products that include the new Spicy Chicken McNuggets, and increasing the use of celebrity spokespersons”.

Telsey Advisory Group analyst Bob Derington raised his price target from $210 to $230 last week, telling clients “we believe new products and cross promotions could broaden McDonald’s appeal to some typically hard to reach user groups, adding potential upside to our same store sales estimates. And to build on its sales momentum, before year-end we believe McDonald’s will introduce some new Breakfast product news and follow that with its long-awaited new Chicken Sandwich, designed to be more competitive with Chick-fil-A.”


Wall Street And Technical Outlook

Wall Street consensus is solidly bullish, with a ‘Strong Buy’ rating based upon 16 ‘Buy’, 5 ‘Hold’, and no ‘Sell’ recommendations. Price targets currently range from a low of $195 to a street-high $245 while the stock is now trading $6 above the median $218 target and just $21 below the high target. Given this lofty placement, more analysts may need to raise their targets to support additional upside.

The breakout could run into a roadblock in the next few sessions, with accumulation-distribution indicators near resistance levels that triggered large-scale reversals in August 2019 and February 2020. As a result, new investors should maintain tight stop losses until these bearish divergences come off the books. Fortunately for bulls, it will only take two or three higher-than-average buying volume sessions to complete the task and open the door to 250.

For a look at all of today’s economic events, check out our economic calendar.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Trade With A Regulated Broker

  • Your capital is at risk
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.