McDonald’s Stock Is Soaring, but Will It Reach a New All-Time High?

McDonald's Stock

McDonald’s stock (NYSE:MCD) is surging on the release of its third-quarter results report. It seems that shares will shortly establish a new all-time high.

The company’s mix of corporate strength, dividend health, dividend growth, and sell-side support has not only catapulted it higher but also fired a powerful technical signal. At first glance, it seems to be a no-brainer for income investors to invest in a best-in-class company at this moment, but there are still hazards ahead.

In general, MCD and the firm are now strong, but this may not remain since upside potential is limited.

McDonald’s Gains on Strong Quarter

McDonald’s had a fantastic quarter, with improvements in all categories. The only genuinely negative news is that a 700 basis point foreign exchange headwind stifled growth and resulted in a revenue drop against the previous year. 

The $5.87 billion in sales is down 5.3% from last year but topped the average number by $0.170 billion, or roughly 300 basis points, indicating that the bad news wasn’t as terrible as predicted and that strength spilled over to the bottom line. All categories grew, with the US up 6.5%, international up 8.5%, and international emerging markets up a significantly greater 16.7%. Global comps were up 9.5% on an FX-neutral basis, outperforming the forecast by 5.8%.

Analysts Buy McDonald’s Stock When It Raises Its Dividend.

McDonald’s is a well-known dividend grower on its way to becoming a Dividend King, but its recent distribution boost surprised the market. The dividend was increased by 10% compared to the predicted five-year CAGR of 8%. With shares selling at $265, the new distribution is worth $1.52 every quarter and annualizes to 2.3%. 

MCD is rated a “moderate-buy” by the 26 analysts that follow it, with a price objective of $283. The $283 objective has been stable in recent quarters, but it may soon begin to rise. So far, there have been five post-release comments, four with price target rises and one with a decrease, with the stock trading above the larger consensus.

The Technical Outlook: McDonald’s Is at a Crossroads

MCD  pricing action is positive. It could hit a new high and send out a powerful signal, but it hasn’t done so yet. Until then, resistance at the all-time high may prevent the stock from breaking out. If this occurs, the stock price may stay range-bound at present levels until further information becomes available. If the stock can break through the barrier, it might continue to rise and reach the consensus number for a 7% or more gain and a new all-time high.

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About the author: Okoro Chinedu is a freelance writer specializing in health and finance, with a keen interest in cryptocurrency and blockchain technology. He has worked in content creation and digital journalism. Since 2019, he has written on various online platforms, and his work has been recognized by several important media sources and specialists in finance and crypto. In addition to writing, Chinedu enjoys reading, playing football, posing as a medical student, and traveling.