McDonald’s sees ratings cut at TD Cowen due to balanced risk-reward profile

TD Cowen lowered its rating on McDonald’s Corporation (NYSE:MCD) on Wednesday due to what it sees as a balanced risk-reward profile on the restaurant stock. The firm now has McDonald’s (MCD) slotted at Hold after having it set at Buy.

Analyst Andrew Charles warned that proprietary survey data on McDonald’s (MCD) suggests a tall hill to climb to improve the brand’s value perceptions vs peers. “While early, July data following the launch of the $5 Meal Deal showed only a modest improvement from June in the percentage of low-income respondents citing above-average value perceptions relative to quick service peers’ change,” updated Charles. He also warned that the firm has less visibility into forecasting International Operated Market trends that are seeing sharp pressures, particularly in France.

In terms of valuation, McDonald’s (MCD) shares were noted to trade roughly in-line with the 12-year average price-to-earnings ratio of ~21. TD Cowen assigned a price target of $280 to McDonald’s (MCD).

The Wall Street analyst scorecard on McDonald’s (MCD) shows 24 Buy-equivalent ratings, 12 Hold-equivalent ratings, and no Sell-equivalent ratings.

Shares of McDonald’s (MCD) slipped 0.85% in premarket trading to $264.19 vs. the 52-week trading range of $243.53 to $302.39.