Is It Worth Investing in McDonald's (MCD) Based on Wall Street's Bullish Views?

Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter?

Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about McDonald's (MCD).

McDonald's currently has an average brokerage recommendation (ABR) of 1.59, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 28 brokerage firms. An ABR of 1.59 approximates between Strong Buy and Buy.

Of the 28 recommendations that derive the current ABR, 18 are Strong Buy and three are Buy. Strong Buy and Buy respectively account for 64.3% and 10.7% of all recommendations.

Brokerage Recommendation Trends for MCD

Check price target & stock forecast for McDonald's here>>>

While the ABR calls for buying McDonald's, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.