McDonald’s shares gain for a second straight session on Thursday, company’s tax deal with Luxembourg not violating EU state aid rules

According to a ruling by EU antitrust regulators earlier this week, McDonald’s tax deal with Luxembourg did not violate state aid rules in the European Union.

McDonald’s shares closed higher for a second consecutive trading session in New York on Thursday. It has also been the sharpest daily surge since August 16th. The stock went up 1.01% ($1.61) to $160.79, after touching an intraday high at $161.05, or a price level not seen since September 14th ($163.11).

Shares of McDonald’s Corporation have retreated 6.58% so far in 2018 compared with a 9.62% gain for the underlying index, S&P 500 (SPX).

In 2017, McDonald’s Corp’s stock surged 41.41%, thus, it outperformed the S&P 500, which registered a 19.42% return.

According to the European Commission, McDonald’s tax deal is considered by EU regulators as being in unison with national tax laws as well as with the double taxation treaty between Luxembourg and the United States.

The three-year investigation by antitrust regulators had focused on Europe Franchising, McDonald’s subsidiary based in Luxembourg, which is a recipient of royalties from franchisees in Europe, Russia and Ukraine.

“Our in-depth investigation has shown that the reason for double non-taxation in this case is a mismatch between Luxembourg and U.S. tax laws, and not a special treatment by Luxembourg. Therefore, Luxembourg did not break EU state aid rules,” European Competition Commissioner Margrethe Vestager was quoted as saying by Reuters.

“Of course, the fact remains that McDonald’s did not pay any taxes on these profits – and this is not how it should be from a tax fairness point of view,” Vestager added.

According to CNN Money, the 26 analysts, offering 12-month forecasts regarding McDonald’s Corporation’s stock price, have a median target of $185.50, with a high estimate of $200.00 and a low estimate of $165.00. The median estimate represents a 15.37% upside compared to the closing price of $160.79 on September 20th.

The same media also reported that 17 out of 31 surveyed investment analysts had rated McDonald’s Corporation’s stock as “Buy”, while 11 – as “Hold”.

Daily and Weekly Pivot Levels

With the help of the Camarilla calculation method, todays levels of importance for the McDonald’s stock are presented as follows:

R1 – $160.94
R2 – $161.10
R3 (Range Resistance – Sell) – $161.25
R4 (Long Breakout) – $161.71
R5 (Breakout Target 1) – $162.25
R6 (Breakout Target 2) – $162.48

S1 – $160.64
S2 – $160.48
S3 (Range Support – Buy) – $160.33
S4 (Short Breakout) – $159.87
S5 (Breakout Target 1) – $159.33
S6 (Breakout Target 2) – $159.10

By using the traditional method of calculation, the weekly levels of importance for McDonald’s Corporation (MCD) are presented as follows:

Central Pivot Point – $162.37
R1 – $164.49
R2 – $168.14
R3 – $170.26
R4 – $172.38

S1 – $158.72
S2 – $156.60
S3 – $152.95
S4 – $149.30