McDonald's (MCD) ended the recent trading session at $307.09, demonstrating a -1.79% swing from the preceding day's closing price. The stock exceeded the S&P 500, which registered a loss of 1.97% for the day. Meanwhile, the Dow lost 1.69%, and the Nasdaq, a tech-heavy index, lost 2.7%.
The the stock of world's biggest hamburger chain has risen by 0.88% in the past month, leading the Retail-Wholesale sector's loss of 4.48% and the S&P 500's loss of 2.79%.
The investment community will be paying close attention to the earnings performance of McDonald's in its upcoming release. The company is forecasted to report an EPS of $2.68, showcasing a 0.74% downward movement from the corresponding quarter of the prior year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.13 billion, down 0.58% from the year-ago period.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $12.25 per share and a revenue of $26.4 billion, representing changes of +4.52% and +1.87%, respectively, from the prior year.
Investors might also notice recent changes to analyst estimates for McDonald's. Such recent modifications usually signify the changing landscape of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.11% increase. Currently, McDonald's is carrying a Zacks Rank of #3 (Hold).
In terms of valuation, McDonald's is currently trading at a Forward P/E ratio of 25.52. This represents a premium compared to its industry's average Forward P/E of 23.4.
Investors should also note that MCD has a PEG ratio of 3.2 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Retail - Restaurants industry currently had an average PEG ratio of 2.22 as of yesterday's close.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. Currently, this industry holds a Zacks Industry Rank of 181, positioning it in the bottom 28% of all 250+ industries.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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McDonald's Corporation (MCD): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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