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McDonald's (MCD) Outpaces Stock Market Gains: What You Should Know

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McDonald's (MCD - Free Report) closed the most recent trading day at $232.64, moving +0.41% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.02%.

Heading into today, shares of the world's biggest hamburger chain had lost 2.29% over the past month, outpacing the Retail-Wholesale sector's loss of 2.72% and lagging the S&P 500's gain of 0.04% 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 $2.10 per share, which would represent year-over-year growth of 218.18%. Our most recent consensus estimate is calling for quarterly revenue of $5.53 billion, up 47.11% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $8.58 per share and revenue of $22.42 billion. These totals would mark changes of +41.82% and +16.73%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for MCD. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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 0.04% higher. MCD currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that MCD has a Forward P/E ratio of 26.99 right now. This valuation marks a discount compared to its industry's average Forward P/E of 29.38.

Investors should also note that MCD has a PEG ratio of 3.11 right now. 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 Retail - Restaurants industry currently had an average PEG ratio of 2.9 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 99, which puts it in the top 39% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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