McDonald's Stock Price Strengthens Amidst Boycott of Pro-Israel Brands

Since the outbreak of the Israel-Hamas war on October 7, 2023, social media has been rife with calls to boycott brands perceived as pro-Israel, one of which is McDonald's Corporation or McD.

However, these boycott calls appear to have had little impact on their share price.

According to Yahoo Finance data, at the close of trading on Thursday (November 2, 2023), the share price of McDonald's Corporation, with the ticker symbol MCD on the New York Stock Exchange, strengthened by 4.88 points, or 1.86%, compared to the previous day.

McD's share price has also tended to increase since mid-October 2023 amid the turmoil of the Israel-Hamas war, although it did experience some corrections in the intervening days.

Their share price actually weakened significantly before the war broke out, particularly in September 2023, as shown in the graph above.

Meanwhile, according to Reza Priyambada, an analyst from the Indonesian Securities Analysts Association (AAEI), the issue of boycotting products deemed pro-Israel does create sentiment affecting the share prices of related issuers.

However, he said, this sentiment is not significantly impactful.

"The impact (of the boycott issue) in terms of sentiment, yes. But it's a momentary sentiment, not long-term, because we have to look at the boycott action; are their products boycotted worldwide? The boycott might only affect McDonald's in Arab countries and Egypt, but perhaps not in Indonesia or Malaysia," said Reza, as reported by Detik.com on Tuesday (October 31, 2023).

"The same applies to McDonald's and (other) brands; are almost all locations closed or not? If it's only a temporary boycott, the impact is not significant at all," Reza said.

Reza believes that a boycott will only affect an issuer's share price in the long term if the action affects the operations of all the company's outlets worldwide.

Besides McDonald's, other brands widely reported as supporting Israel include Starbucks, KFC, PepsiCo, Netflix, and Walt Disney.

Although they experienced a temporary weakening, the share prices of several of these companies were observed to have strengthened again at the close of trading on Thursday (November 2, 2023).