McDonald's (MCD) closed at $310.84 in the latest trading session, marking a -1.7% move from the prior day. The stock's change was less than the S&P 500's daily gain of 0.46%. Elsewhere, the Dow gained 0.17%, while the tech-heavy Nasdaq added 0.57%.
The world's biggest hamburger chain's stock has climbed by 3.71% in the past month, exceeding the Retail-Wholesale sector's gain of 3.47% and lagging the S&P 500's gain of 4.22%.
Investors will be eagerly watching for the performance of McDonald's in its upcoming earnings disclosure. The company is forecasted to report an EPS of $3, showcasing a 6.01% upward movement from the corresponding quarter of the prior year. At the same time, our most recent consensus estimate is projecting a revenue of $6.81 billion, reflecting a 6.6% rise from the equivalent quarter last year.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $12.08 per share and a revenue of $26.67 billion, signifying shifts of +3.07% and +2.9%, respectively, from the last year.
It is also important to note the recent changes to analyst estimates for McDonald's. These recent revisions tend to reflect the evolving nature of short-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.
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.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, there's been a 0.18% fall in the Zacks Consensus EPS estimate. McDonald's is currently sporting a Zacks Rank of #3 (Hold).
From a valuation perspective, McDonald's is currently exchanging hands at a Forward P/E ratio of 26.17. For comparison, its industry has an average Forward P/E of 21.17, which means McDonald's is trading at a premium to the group.
Meanwhile, MCD's PEG ratio is currently 3.52. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. MCD's industry had an average PEG ratio of 2.34 as of yesterday's close.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 193, putting it in the bottom 22% of all 250+ industries.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. 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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