A leading consumer activist group is calling for a weeklong boycott of McDonald’s (MCD), a development analysts worry could dent the company’s upcoming second-quarter financial results.
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The People’s Union USA, a grassroots advocacy group, is urging a nationwide boycott against McDonald’s in America from June 24 to 30 as part of a broader campaign that calls for economic resistance, corporate accountability, and justice for the working class.
At the same time, the People’s Union is accusing McDonald’s of “tax avoidance, lobbying against wage increases, and rolling back diversity practices,” according to a social media post about the boycott. Although a seven-day protest is unlikely to hurt the Golden Arches long-term, some analysts are worried it may impact the company’s second-quarter financial results that are scheduled to be released on Aug. 4.
Bad Publicity
Some folks on Wall Street also say that there’s a risk the boycott lasts longer than a week if consumers support the action. In such a case, McDonald’s might face a long-term brand crisis. While it remains to be seen if the boycott turns into something bigger, discount retailer Target (TGT) has faced a similar boycott that has been ongoing since February of this year.
The boycott, even if it is only a week, comes at a sensitive time for McDonald’s and its stock. In May, the fast-food giant reported first-quarter revenue of $5.96 billion, down 3.5% from a year earlier, and earnings of $2.67 per share, down 1% year-over-year.
MCD stock hit a record high of $326 in March of this year but has fallen 10% in the past month. Analysts have been downgrading the company’s shares since the first-quarter print.
Is MCD Stock a Buy?
The stock of McDonald’s has a consensus Moderate Buy rating among 26 Wall Street analysts. That rating is based on 11 Buy, 14 Hold, and one Sell recommendations issued in the last three months. The average MCD price target of $328.89 implies 13.60% upside from current levels.
