In the latest trading session, McDonald's (MCD) closed at $316.22, marking a -0.71% move from the previous day. The stock trailed the S&P 500, which registered a daily gain of 2.03%. On the other hand, the Dow registered a gain of 1.23%, and the technology-centric Nasdaq increased by 2.74%.
Prior to today's trading, shares of the world's biggest hamburger chain had gained 1.56% over the past month. This has outpaced the Retail-Wholesale sector's loss of 2.36% and the S&P 500's loss of 5.07% in that time.
The investment community will be closely monitoring the performance of McDonald's in its forthcoming earnings report. The company is scheduled to release its earnings on May 1, 2025. It is anticipated that the company will report an EPS of $2.64, marking a 2.22% fall compared to the same quarter of the previous year. Our most recent consensus estimate is calling for quarterly revenue of $6.08 billion, down 1.36% from the year-ago period.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $12.21 per share and revenue of $26.39 billion, indicating changes of +4.18% and +1.79%, respectively, compared to the previous year.
Investors should also note any recent changes to analyst estimates for McDonald's. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
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. The Zacks Consensus EPS estimate has moved 0.36% lower within the past month. At present, McDonald's boasts a Zacks Rank of #3 (Hold).
Digging into valuation, McDonald's currently has a Forward P/E ratio of 26.09. For comparison, its industry has an average Forward P/E of 21.24, which means McDonald's is trading at a premium to the group.
Meanwhile, MCD's PEG ratio is currently 3.28. 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 2.17 as of yesterday's close.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. With its current Zacks Industry Rank of 206, this industry ranks in the bottom 17% of all industries, numbering over 250.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to follow all of these stock-moving metrics, and many 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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