McDonald’s Corporation (MCD) Allegedly Abusing Market Position in Europe

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Shares of McDonald’s Corporation (NYSE:MCD) are trading higher today despite reports out of Europe that three different consumer groups in Italy are accusing the fast food giant of abusing their market position in order to charge higher rents and royalties while also signing restrictive contracts. These groups have just filed an antitrust complaint with the European Commission thanks in part to their cooperation with the Service Employees International Union.

“McDonald’s abuse of its dominant market position hurts everyone: franchisees, consumers, and workers,” said Scott Courtney, organizing director at SEIU.

With over 8,000 restaurants in Europe, the stakes may be high for McDonald’s Corporation (NYSE:MCD) if the European Commission rules against them. In addition to these allegations, the EU is also investigating claims that McDonalds may have received a beneficial tax deal from Luxembourg. McDonalds has thus far defended their actions in all these cases.

The stock is trading higher by 0.33% or $0.38 hitting $117.07, despite the rather negative news. About 1.17M shares traded hands. MCD has risen 22.42% since June 8, 2015 and is uptrending. It has outperformed the S&P500 by 29.90%.

From a total of 11 analysts covering McDonald’s Corporation (NYSE:MCD) stock, 11 rate it a “Buy”, 0 a “Sell”, and 0 a “Hold”. This means that 100% of the ratings are positive. The highest target price is $130 while the lowest target price is $35. The mean of all analyst targets is $113.79 which is -2.80% below today’s ($117.07) stock price. McDonald’s Corporation was the topic of 22 analyst reports since September 29, 2015 according to the firm StockzIntelligence Inc. Nomura upgraded shares on January 4 to a “Buy” rating. Piper Jaffray upgraded shares to a”Overweight” rating and a $130 target share price in their report from an October 23. Barclays Capital maintained MCD stock in a recent report from November 11 with a “Overweight” rating. SunTrust initiated the rating on October 13. SunTrust has a “Buy” rating and a $117 price target on shares. Finally, RBC Capital Markets maintained the stock with a “Outperform” rating in a report they issued on a November 11.

The institutional sentiment increased to 0.72 in Q2 2015. It’s up 0.11, from 0.61 in 2015Q2. The ratio improved, as 79 funds sold all their McDonald’s Corporation shares they owned while 662 reduced their positions. 92 funds bought stakes while 438 increased their total positions. Institutions now own 567.05 million shares which is 10.07% less than the previous share count of 630.58 million in 2015Q2.

Highfields Capital Management Lp holds 10.24% of its total portfolio in McDonald’s Corporation, equating to 11.78 million shares. Silver Rock Financial Llc owns 144,605 shares representing 8.79% of their total US portfolio. Moreover, Wcg Management L.P. has 8.05% of their total portfolio invested in the company, equating to 181,835 shares. The Tennessee-based Southeastern Asset Management Inc Tn has a total of 7.02% of their portfolio invested in the stock. Covey Capital Advisors Llc, a Georgia-based fund reported 121,470 shares owned.

Since March 13, 2015, the stock had 0 insider purchases, and 2 selling transactions for a total of $1.30 million in net activity. Goare Douglas M sold 12,050 shares worth $1.21 million. Hoffmann David L sold 979 shares worth $94,317. Mcmillan Cary D sold 1,075 shares worth $105,447. Armario Jose sold 10,000 shares worth $975,800. The insider Sappington James R sold 11,123 shares worth $1.08M.

McDonald’s Corporation operates and franchises McDonald’s restaurants. The company has a market cap of $107.50 billion. McDonald’s global system comprises both Company-owned and franchised restaurants. It has 25.31 P/E ratio. The Firm manages its business as distinct geographic divisions: the United States ; Europe, and Asia/Pacific, Middle East and Africa (APMEA).

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