RBC is unimpressed by McDonald's new dollar menu
Shares of McDonald's Corporation (NYSE:MCD) are down 4.1% this morning at $149.31, as they continue to pull back from their Jan. 29 record high of $178.70. Sparking today's sell-off is a price-target cut to $170 from $190 at RBC, which cited lackluster early sales data for the fast food company's new dollar menu. As such, MCD stock is pacing for its lowest weekly settlement since May, down 8.1% for the week -- which would actually mark its third worst weekly performance in the past decade.
Short sellers have been moving in amid the stock's recent weakness. In the last two reporting periods alone, short interest jumped 15.3%. Despite this, less than 1% of the equity's float is controlled by short sellers, suggesting there's plenty of room on the bearish bandwagon.
Not only could rising short interest weigh on MCD shares, but an unwinding of optimism from other analysts and options traders could also be a factor. For example, 21 of 26 brokerage firms say the Dow component is a "buy" and the average 12-month price target stands all the way up at $188.44.
And at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security has accumulated a 10-day call/put volume ratio of 1.31, which ranks in the 71st annual percentile. This confirms call buying has been unusually popular compared to put buying.