McDonald's Takes Action Amid Coronavirus Crisis

Most analysts still like MCD

by Lillian Currens

Published on Mar 17, 2020 at 9:55 AM
Updated on Jun 24, 2020 at 10:16 AM

Fast food giant McDonald's Corp (NYSE:MCD) is treading just below breakeven before the open this morning, down 0.3% at $149.03 as the company contends with how to move forward in the face of mass coronavirus closures in the U.S. MCD said it plans on closing many of its dine-in areas, while shifting to carry-out and delivery services. Many other big restaurant names have followed suit in the past few days, including Starbucks (SBUX) and Shake Shack (SHAK). 

McDonald's like most of the stock market, has seen a steep decline in the past few weeks, which culminated in a two-year low of $147.62 yesterday. Coming into today, the stock was off 24.6% for the year. 

Analysts are holding out hope for the burger specialist. Nineteen still call MCD a "buy" or better, compared to just eight saying "hold," with not a single "sell" rating on the table. Additionally, the consensus 12-month target price of $227.10 is a solid 52.4% premium to last night's close. 

The options pits, on the other hand, have taken an overwhelmingly pessimistic stance. In the last 10 days, 2.47 puts have been picked up for every call at the the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits in the 100th percentile of its annual range, suggesting a much healthier appetite for long puts of late. 


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