McDonald’s Builds Momentum After Quarterly ResultsMcDonald’s share price has been stuck in the slow lane for months, but its latest earnings report has given the stock a much-needed boost. A stronger-than-expected sales performance saw shares jump nearly 5% during yesterday’s session, signalling that investors are starting to take notice again.
Quarterly Results: Signs of a Turnaround
McDonald’s reported a 0.4% rise in global comparable sales for the fourth quarter, a sharp contrast to the 0.4% decline analysts had been expecting. The recovery was driven in part by a stronger performance in international markets, particularly in the Middle East, where sales have improved following last year’s boycott-related weakness. While total revenue remained flat at $6.4 billion, the market’s reaction suggests confidence in the company’s ability to navigate recent challenges.
The US market was a notable weak spot, with comparable sales falling 1.4% as customers reined in spending. An E. coli outbreak in late 2023 also took a toll, temporarily forcing restaurant closures in some states. However, McDonald’s expects US sales to stabilise by Q2, helped by continued promotions and a steady recovery in footfall. Despite these near-term pressures, the latest figures suggest that the worst may be behind the company.
Technical Analysis: Momentum Building Again
McDonald’s share price has been struggling since the October E. coli outbreak triggered a sharp drop, leaving the stock stuck in a choppy range while the wider market pushed higher. Buyers finally stepped in at the 200-day moving average in mid-January, providing the foundation for a recovery. Since then, the stock has broken back above the 50-day moving average, signalling improving momentum.
Yesterday’s earnings reaction saw the shares gap higher and push further into positive territory on strong volume, closing near the highs of the session. The next key test lies ahead, with resistance at the top of the October gap and trend highs just above. A break through these levels could open the door for a more sustained move higher, shifting the focus firmly back towards the long-term uptrend.
McDonald’s (NYSE: MCD) Daily Candle Chart
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