McDonald's (MCD) closed at $299.86 in the latest trading session, marking a -1.12% move from the prior day. The stock's performance was behind the S&P 500's daily gain of 0.64%. Elsewhere, the Dow gained 1.23%, while the tech-heavy Nasdaq added 0.69%.
Shares of the world's biggest hamburger chain have depreciated by 2.56% over the course of the past month, underperforming the Retail-Wholesale sector's loss of 1.59%, and the S&P 500's gain of 0.55%.
Market participants will be closely following the financial results of McDonald's in its upcoming release. The company is forecasted to report an EPS of $3, showcasing a 6.01% upward movement from the corresponding quarter of the prior year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.81 billion, up 6.6% from the year-ago period.
MCD's full-year Zacks Consensus Estimates are calling for earnings of $12.08 per share and revenue of $26.67 billion. These results would represent year-over-year changes of +3.07% and 0%, respectively.
Any recent changes to analyst estimates for McDonald's should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. 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, there's been a 0.1% fall in the Zacks Consensus EPS estimate. McDonald's is currently sporting a Zacks Rank of #3 (Hold).
Digging into valuation, McDonald's currently has a Forward P/E ratio of 22.88. For comparison, its industry has an average Forward P/E of 18.43, which means McDonald's is trading at a premium to the group.
Meanwhile, MCD's PEG ratio is currently 3.08. 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 average PEG ratio for the Retail - Restaurants industry stood at 1.96 at the close of the market yesterday.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 204, finds itself in the bottom 17% echelons of all 250+ industries.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in 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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