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This is why McDonald’s stock is down in 2024

This is why McDonald’s stock is down in 2024

McDonald’s (NYSE: MCD) 2024 stock market troubles have already been linked to the Gaza-associated boycotts, though Starbucks (NASDAQ: SBUX) has taken the bulk of attention in this regard – despite its status as an officially targeted entity being dubious  – and has also taken substantial stock market damage,

In fact, it was actually McDonald’s that first the ire of the support of Palestine and the early actions of McDonald’s Israel have also triggered something of a feud between the corporate fiefdoms. As the Israeli franchise was giving meals to the IDF, McDoland’s Qatar was donating money to humanitarian assistance to Gaza.

The pressure has only grown in recent months as reports are estimating that as many as 170,000 Palestinians have died amidst untold destruction in the current phase of the occupation of the West Bank and conflict in Gaza, triggered by the October 7 Hamas attack.

McDonald’s (NYSE: MCD) stock

Either way, the boycotts targeting the restaurant chain have seemingly had an impact on MCD stock as it, after showing significant resilience and even undergoing a rally in late 2023, dropped significantly in the first half of 2024.

In the year-to-date (YTD) chart, the restaurant’s shares are 17.03% in the red, and McDonald’s price today stands at $246.46. 

MCD stock YTD price chart. Source: Finbold

The fact that MCD stock stood at almost the exact same price just days after the October 7 attacks only to rebound to just under $300 and crash again may offer some explanation as to why the restaurant chain has been supplanted by Starbucks as a boycott target in the public conscience. 

Still, it is likely that the war in the Middle East is not the sole reason for McDonald’s weak performance in 2024. 

Is inflation bringing McDonald’s stock down?

While the recent inflation figures signal a return to normality and the stock market – or at least the biggest companies in the technology sector – have been doing exceptionally well this year, much has been said about the cost-of-living crisis.

Indeed, the price of eggs in the U.S. has become something of a symbol of the times, and the damage already done to consumers and the McDonald’s menu has itself been scrutinized.

In fact, May reports indicate that the price of the restaurant chain’s items has grown some 40% in the last five years. The vanishing $1 deals have been discussed since 2023. 

Meals on this menu in particular demonstrate how things have become more expensive as, for example, The McChicken cost $1 in 2018 and $2.39 by August 2023.

It is, nonetheless, worth noting that despite the outrage and the price increases, the latest McDonald’s earnings report, published in late April, did not substantially underperform in terms of earnings-per-share (EPS) and revenue – at least not when compared to analysts’ forecasts – hinting that the stock market decline may stem as much from a fear of things to come as from what has already come to pass.

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