Shares of McDonald’s Corp. were on pace to reach an all-time high on Friday and set to notch their longest winning streak since September 2020.
The stock was up 0.9% to $280.27 in early-afternoon trade. Shares of the burger chain have risen for seven straight days, after seesawing in rangebound trading for much of this year. McDonald’s
MCD,
had contributed 16.35 points to the Dow Jones Industrial Average so far on Friday.
Other restaurant stocks, like Wendy’s Co.
WEN,
Burger King parent Restaurant Brands International Inc.
QSR,
and Jack In The Box Inc.
JACK,
have staged modest rebounds during the latter portion of this month.
Those gains come as customers seek cheaper ways to eat after both restaurants and grocery stores raised their prices last year. But restaurant analyst Mark Kalinowski, chief executive of Kalinowski Equity Research, told MarketWatch in January that “it just seems like Americans are more upset by the change in price at grocery stores and supermarkets,” rather than at restaurants.
Siye Desta, an analyst at CFRA, said in a research note this month that since the start of 2021, the percentage of monthly spending on dining out has increased relative to grocery stores, rising noticeably in January but declining somewhat last month.
“We expect food-away-from-home spending to hold up well in 2023 as consumers continue to pivot spending from goods to services, return to the office, and find ways to conveniently and economically feed their families in light of the uncertain macro environment,” he said.
He added that the reopening of China’s economy could provide a “sizeable tailwind” for McDonald’s and other chains with business in the nation. And he said that margins should improve, as food and paper costs ease. Those margins, he said, could still come under pressure from higher wages, as workers seek more money to cover rising expenses and restaurants try to attract and retain talent.
Other analysts have said that restaurants could have to raise prices more this year, as they try to meet investors’ expectations on profit margins.
McDonald’s in January reported fourth-quarter results that beat expectations. Price increases and digital orders helped push sales trends higher, and management, during the company’s earnings call, called out promotions for items like the McRib, and collaborations with fashion-design brand Cactus Plant Flea Market and throwback Halloween pails.
Shares of McDonald’s are up 13.2% over the past 12 months. By comparison, the S&P 500 Index
SPX,
has fallen 9.8% over that period.
