C-Suite Legal Drama Engulfs McDonald's

McDonald's stock is trying to reclaim its year-to-date breakeven level

Deputy Editor
Aug 10, 2020 at 2:22 PM
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The shares of McDonald's Corp (NYSE:MCD) are down this afternoon, after the company announced it's suing its former CEO, Steve Easterbrook, for allegedly lying during an internal probe concerning his behavior. As a result, MCD is down 0.3%, last seen trading at $203.96.

On July 28, McDonald's stock dipped after an earnings bust, but managed to break back above the formerly resistant $200 level a little over a week later. MCD's pullback was captured by its 200-day moving average. Furthermore, the equity boasts a 10.5% quarter-to-date lead, though it's still sitting well below its year-to-date breakeven level.

MCD Chart August 10

Meanwhile, analysts are approaching MCD with a rather bullish attitude. Of the 25 in coverage, 18 brokerages sport a "buy" or better recommendation. Plus, the consensus 12-month target price of $213.03 is a 4.6% premium to the stock's current levels. 

Lastly, with earnings out of the way, MCD options can be had cheaply amid a volatility crush. The equity's Schaeffer's Volatility Index (SVI) of 20% stands higher than just 9% of all other readings from the past year, implying that near-term option traders are pricing in relatively low volatility expectations.

 

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