McDonald’s Corporation (NYSE:MCD) not only a big day yesterday as it jumped with a very sharp gap up but also for signalling a multi-year breakout, very significant from the long term perspective. The stock ended the last trading session with a huge gain of 8.12%. The volume surged to 25 million against the daily average of 7.3 million, supporting the price action in a very commensurate manner. The price action suggests a rerating of the stock and in the coming months the bulls can well take it $120 or even higher levels.
McDonald’s Corporation (NYSE:MCD) has announced that it would be joining 80 other companies in the signing of the “American Business act on Climate Pledge.” As per the act, the concerned businesses would aim to reduce the emission of greenhouse gases by 26-28, economy-wide. Until now, McDonald’s and Starbucks are the only two of the more prominent businesses on the list. The announcement came soon after MCD posted a strong 3Q2015 result, after struggling in the past few months.
McDonald’s is thought more of as a charitable institution, but not a global citizen, a reputation that Starbucks enjoys. However, with the signing of this pledge, MCD aims to make significant changes to its working practices and bring a change in its outlook as an environmentally friendly food-chain. The company’s Chief supply chain and sustainability officer, Francesca DeBiase, stated that the pledge would set some sustainability goals for the company, aimed at a low-carbon future. As per the details of the pledge, the participants are required to:
- Reduce Emissions by 50%.
- Purchase 100% renewable energy.
- Move towards zero waste-to-landfill.
- Reduce deforestation in supply chain to 0.
- Reduce Water usage by almost 80%.
During its 3Q2015, McDonald’s announced a rise of 4% in same store-sales, worldwide. However, the figure for US showed only a 0.9% increase compared to the same period last year. The sales helped MCD post a profit of $1.3 billion, compared to $1.07 billion last year. Additionally, the EPS also surpassed analyst expectations of $1.27, by $0.13. However, MCD also disclosed spending $3.1 billion in share buybacks and dividends, to help boost the EPS. A new and better menu, coupled with an all-day breakfast offering has quickly become one of the major factors in attracting customers for MCD. With the move towards becoming more environmentally friendly, McDonald’s hopes to once again regain its glory as a premium fast-food-chain.
McDonald’s Corporation (NYSE:MCD) gained 8.11% during the October 22 session, to reach a close at $110.86. The stock experienced a trade volume of 25.29 million shares.