McDonald’s posted disappointing second-quarter results on Monday, falling short of expectations on both earnings per share and revenue. The fast-food giant blamed a challenging economic environment for the decline, with consumers cutting back on spending and opting for cheaper menu items or home-cooked meals.
Despite the weaker-than-expected performance, McDonald’s stock rallied by 3.7% on the day, outperforming the Dow Jones. Investors appeared to be encouraged by the company’s maintained outlook for new store openings, capital expenditures, and operating margins. Additionally, the extension of the popular $5 combo meal beyond its initial one-month period has boosted investor confidence.
However, technical analysts remain cautious. While a recent price drop below the 2023 low failed to trigger further selling, the stock’s upward trend has been broken. The price is now facing significant resistance near the $265 level, a former support level turned resistance.
Jefferies analysts maintain a “buy” rating on McDonald’s but have lowered their price target from $320 to $310, reflecting the challenges the company faces.
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Ultimately, the sustainability of McDonald’s stock price rise will depend on its ability to overcome current economic headwinds and regain consumer confidence.
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