McDonald's (MCD) closed the most recent trading day at $314.50, moving -1.33% from the previous trading session. This move lagged the S&P 500's daily loss of 0.24%. Elsewhere, the Dow saw a downswing of 0.62%, while the tech-heavy Nasdaq appreciated by 0.23%.
The world's biggest hamburger chain's shares have seen an increase of 4.54% over the last month, surpassing the Retail-Wholesale sector's gain of 0.53% and the S&P 500's gain of 1.31%.
The investment community will be paying close attention to the earnings performance of McDonald's in its upcoming release. The company's earnings per share (EPS) are projected to be $3, reflecting a 6.01% increase from the same quarter last year. Meanwhile, our latest consensus estimate is calling for revenue of $6.81 billion, up 6.6% from the prior-year quarter.
For the full year, the Zacks Consensus Estimates are projecting earnings of $12.11 per share and revenue of $26.68 billion, which would represent changes of +3.33% and +2.92%, respectively, from the prior year.
Investors might also notice recent changes to analyst estimates for McDonald's. Recent revisions tend to reflect the latest near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. 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. The Zacks Consensus EPS estimate has moved 0.19% lower within the past month. Right now, McDonald's possesses a Zacks Rank of #3 (Hold).
Digging into valuation, McDonald's currently has a Forward P/E ratio of 26.33. Its industry sports an average Forward P/E of 20.85, so one might conclude that McDonald's is trading at a premium comparatively.
It is also worth noting that MCD currently has a PEG ratio of 3.54. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Retail - Restaurants industry had an average PEG ratio of 2.36 as trading concluded yesterday.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. At present, this industry carries a Zacks Industry Rank of 178, placing it within the bottom 28% of over 250 industries.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming 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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