In the latest trading session, McDonald's (MCD) closed at $285.55, marking a -2.03% move from the previous day. Elsewhere, the Dow lost 0.25%, while the tech-heavy Nasdaq added 0.31%.
Shares of the world's biggest hamburger chain witnessed a loss of 7.46% over the previous month, trailing the performance of the Retail-Wholesale sector with its gain of 2.13%, and the S&P 500's gain of 5.05%.
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 $3.14, showcasing a 5.72% upward movement from the corresponding quarter of the prior year. At the same time, our most recent consensus estimate is projecting a revenue of $6.7 billion, reflecting a 3.18% rise from the equivalent quarter last year.
For the full year, the Zacks Consensus Estimates are projecting earnings of $12.25 per share and revenue of $26.35 billion, which would represent changes of +4.52% and +1.64%, respectively, from the prior year.
Investors might also notice 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.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.
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 0.09% higher within the past month. McDonald's is currently sporting a Zacks Rank of #3 (Hold).
In terms of valuation, McDonald's is currently trading at a Forward P/E ratio of 23.8. For comparison, its industry has an average Forward P/E of 23.01, which means McDonald's is trading at a premium to the group.
It is also worth noting that MCD currently has a PEG ratio of 3.04. 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 2.62 as of yesterday's close.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. At present, this industry carries a Zacks Industry Rank of 145, placing it within the bottom 42% of over 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.
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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