Fast Food Giant Flaunts Upbeat Earnings, Forecast

The stock is rebounding toward its recent record highs

Deputy Editor
Oct 27, 2021 at 10:38 AM
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McDonald's Corp (NYSE:MCD) stock is up 3.1% to trade at $243.75, after the fast food giant reported better-than-expected third-quarter earnings and revenue and raised its full-year forecast. The company's international sales rebounded as Covid-19 restrictions eased, plus, the new chicken sandwich and other new menu items gave profits a boost. 

Prior to today's jump, McDonald's stock had been falling from its Oct. 7 record high of $249.95. Moving toward those highs once again, today's pop has MCD back above the 100-day moving average, which the stock closed below this week for the first time since March. This trendline also captured multiple pullbacks in August. This positive price action could have already been in the cards, per MCD's Relative Strength Index (RSI) of 23.8, which sits firmly in "oversold" territory. Year-to-date, the equity is up 13.4%.

Analysts have yet to chime in after earnings, but the brokerage bunch is already leaning bullish. Of the 26 in coverage, 19 carry a "buy" or better rating on McDonald's stock, with seven a tepid "hold." Meanwhile, the 12-month consensus price target of $267.73 represents never-before-seen highs, and a 10% premium to the stock's current price. 

The options pits, on the other hand, are bursting with activity. So far, 15,000 calls and 5,911 puts have crossed the tape -- five times the intraday average. The weekly 10/29 245-strike call is the most popular, followed by the 240-strike call in the same series. 

 

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