Sumitomo Mitsui Trust Group Cuts McDonald's Holdings Amid Growing Competition
Sumitomo Mitsui Trust Group Inc., a significant investor in McDonald's Corporation (NYSE:MCD), has reduced its holdings in the fast-food giant by selling 14,493 shares during the second quarter. The fund now owns 1,886,789 shares of MCD, which accounts for about 0.27% of the company's outstanding stock and is worth approximately $510 million.
This move comes as McDonald's faces increased competition from low-cost alternatives, including Burger King and gas-station food. The company has been trying to win back cost-conscious customers with lower-priced meals and new growth initiatives, such as Red Bull energy drinks and limited-time menu items. However, the results have been mixed, with second-quarter sales growth slowing down.
The institutional investors' and hedge funds' ownership in McDonald's stands at 70.29%. Several research analysts have commented on MCD shares, with some upgrading their ratings and price targets. For example, Rothschild & Co Redburn upgraded McDonald's from a 'sell' rating to a 'neutral' rating and lifted their price target for the stock from $260 to $306.