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McDonald's (MCD) Dips More Than Broader Markets: What You Should Know

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McDonald's (MCD - Free Report) closed at $233.88 in the latest trading session, marking a -0.72% move from the prior day. This change lagged the S&P 500's 0.04% loss on the day.

Prior to today's trading, shares of the world's biggest hamburger chain had gained 2.36% over the past month. This has outpaced the Retail-Wholesale sector's gain of 1.48% and the S&P 500's gain of 1.35% in that time.

MCD will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $2.10, up 218.18% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $5.53 billion, up 47.11% from the year-ago period.

MCD's full-year Zacks Consensus Estimates are calling for earnings of $8.58 per share and revenue of $22.42 billion. These results would represent year-over-year changes of +41.82% and +16.73%, respectively.

It is also important to note the recent changes to analyst estimates for MCD. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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 0.04% higher. MCD is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that MCD has a Forward P/E ratio of 27.45 right now. This valuation marks a discount compared to its industry's average Forward P/E of 28.54.

Investors should also note that MCD has a PEG ratio of 3.17 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. MCD's industry had an average PEG ratio of 2.83 as of yesterday's close.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 90, putting it in the top 36% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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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