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McDonald's (MCD) Stock Moves -1.4%: What You Should Know

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McDonald's (MCD - Free Report) closed the most recent trading day at $239.09, moving -1.4% from the previous trading session. This change was narrower than the S&P 500's 1.7% loss on the day.

Prior to today's trading, shares of the world's biggest hamburger chain had gained 1.68% over the past month. This has lagged the Retail-Wholesale sector's gain of 2.56% and outpaced the S&P 500's loss of 0.27% 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 $2.44 per share, which would represent year-over-year growth of 9.91%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6 billion, up 10.82% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $9 per share and revenue of $22.94 billion, which would represent changes of +48.76% and +19.41%, respectively, from the prior year.

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

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.46% higher. MCD is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that MCD has a Forward P/E ratio of 26.95 right now. This represents a premium compared to its industry's average Forward P/E of 22.28.

Also, we should mention that MCD has a PEG ratio of 2.39. 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. The Retail - Restaurants was holding an average PEG ratio of 2.39 at yesterday's closing price.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 121, which puts it in the top 48% 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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