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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 the most recent trading day at $265.55, moving +0.39% from the previous trading session. The stock outpaced the S&P 500's daily loss of 0.87%. At the same time, the Dow lost 0.08%, and the tech-heavy Nasdaq lost 0.43%.

Prior to today's trading, shares of the world's biggest hamburger chain had gained 4.68% over the past month. This has outpaced the Retail-Wholesale sector's loss of 4.65% and the S&P 500's gain of 0.7% in that time.

McDonald's will be looking to display strength as it nears its next earnings release. In that report, analysts expect McDonald's to post earnings of $2.32 per share. This would mark year-over-year growth of 36.47%. Meanwhile, our latest consensus estimate is calling for revenue of $6.03 billion, up 13.47% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $9.42 per share and revenue of $23.22 billion, which would represent changes of +55.7% and +20.9%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for McDonald's. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.

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 0.42% higher. McDonald's is currently a Zacks Rank #2 (Buy).

Digging into valuation, McDonald's currently has a Forward P/E ratio of 28.08. This valuation marks a premium compared to its industry's average Forward P/E of 23.81.

Meanwhile, MCD's PEG ratio is currently 2.45. 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. Retail - Restaurants stocks are, on average, holding a PEG ratio of 2.01 based on yesterday's closing prices.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 236, which puts it in the bottom 8% 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.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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