McDonald's (MCD) closed the most recent trading day at $300.52, moving -1.11% from the previous trading session. This move lagged the S&P 500's daily gain of 0.34%. Meanwhile, the Dow gained 0.09%, and the Nasdaq, a tech-heavy index, added 0.42%.
The stock of world's biggest hamburger chain has fallen by 3.76% in the past month, lagging the Retail-Wholesale sector's gain of 0.41% and the S&P 500's gain of 3.54%.
The upcoming earnings release of McDonald's will be of great interest to investors. It is anticipated that the company will report an EPS of $3.4, marking a 5.26% rise compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $7.07 billion, reflecting a 2.81% rise from the equivalent quarter last year.
For the full year, the Zacks Consensus Estimates are projecting earnings of $12.36 per share and revenue of $26.68 billion, which would represent changes of +5.46% and +2.94%, respectively, from the prior year.
Investors might also notice recent changes to analyst estimates for McDonald's. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.02% downward. McDonald's is holding a Zacks Rank of #3 (Hold) right now.
In terms of valuation, McDonald's is presently being traded at a Forward P/E ratio of 24.6. This expresses a premium compared to the average Forward P/E of 23.52 of its industry.
It's also important to note that MCD currently trades at a PEG ratio of 3.09. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. By the end of yesterday's trading, the Retail - Restaurants industry had an average PEG ratio of 2.35.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. At present, this industry carries a Zacks Industry Rank of 197, placing it within the bottom 21% of over 250 industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.
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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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