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McDonald's (MCD) Gains As Market Dips: What You Should Know

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McDonald's (MCD - Free Report) closed at $211.92 in the latest trading session, marking a +0.12% move from the prior day. This move outpaced the S&P 500's daily loss of 0.21%. Elsewhere, the Dow lost 0.67%, while the tech-heavy Nasdaq added 0.51%.

Prior to today's trading, shares of the world's biggest hamburger chain had lost 2.46% over the past month. This has lagged the Retail-Wholesale sector's gain of 2.29% and the S&P 500's gain of 4% in that time.

MCD will be looking to display strength as it nears its next earnings release. On that day, MCD is projected to report earnings of $1.79 per share, which would represent a year-over-year decline of 9.14%. Meanwhile, our latest consensus estimate is calling for revenue of $5.37 billion, up 0.38% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $6.19 per share and revenue of $19.23 billion. These totals would mark changes of -21.05% and -8.77%, respectively, from last year.

Any recent changes to analyst estimates for MCD should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

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. Within the past 30 days, our consensus EPS projection has moved 0.59% lower. MCD is currently a Zacks Rank #3 (Hold).

Investors should also note MCD's current valuation metrics, including its Forward P/E ratio of 34.19. For comparison, its industry has an average Forward P/E of 33.11, which means MCD is trading at a premium to the group.

Investors should also note that MCD has a PEG ratio of 4.22 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. MCD's industry had an average PEG ratio of 3.13 as of yesterday's close.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 169, which puts it in the bottom 34% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks 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 follow all of these stock-moving metrics, and many more, on Zacks.com.


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