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Why the Market Dipped But McDonald's (MCD) Gained Today
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The latest trading session saw McDonald's (MCD - Free Report) ending at $295.19, denoting a +0.49% adjustment from its last day's close. This change outpaced the S&P 500's 0.17% loss on the day. At the same time, the Dow lost 0.06%, and the tech-heavy Nasdaq lost 0.55%.
The the stock of world's biggest hamburger chain has fallen by 0.3% in the past month, lagging the Retail-Wholesale sector's gain of 0.24% and the S&P 500's gain of 3.98%.
The investment community will be closely monitoring the performance of McDonald's in its forthcoming earnings report. The company is expected to report EPS of $2.72, up 3.42% from the prior-year quarter. In the meantime, our current consensus estimate forecasts the revenue to be $6.18 billion, indicating a 4.86% growth compared to the corresponding quarter of the prior year.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $12.38 per share and a revenue of $26.96 billion, indicating changes of +3.69% and +5.75%, respectively, from the former year.
It is also important to note the recent changes to analyst estimates for McDonald's. These revisions typically reflect the latest short-term business trends, which can change frequently. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.78% lower within the past month. Right now, McDonald's possesses a Zacks Rank of #3 (Hold).
From a valuation perspective, McDonald's is currently exchanging hands at a Forward P/E ratio of 23.73. This signifies a premium in comparison to the average Forward P/E of 20.83 for its industry.
One should further note that MCD currently holds a PEG ratio of 3.17. 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 2.07 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 101, which puts it in the top 41% of all 250+ industries.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained 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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Why the Market Dipped But McDonald's (MCD) Gained Today
The latest trading session saw McDonald's (MCD - Free Report) ending at $295.19, denoting a +0.49% adjustment from its last day's close. This change outpaced the S&P 500's 0.17% loss on the day. At the same time, the Dow lost 0.06%, and the tech-heavy Nasdaq lost 0.55%.
The the stock of world's biggest hamburger chain has fallen by 0.3% in the past month, lagging the Retail-Wholesale sector's gain of 0.24% and the S&P 500's gain of 3.98%.
The investment community will be closely monitoring the performance of McDonald's in its forthcoming earnings report. The company is expected to report EPS of $2.72, up 3.42% from the prior-year quarter. In the meantime, our current consensus estimate forecasts the revenue to be $6.18 billion, indicating a 4.86% growth compared to the corresponding quarter of the prior year.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $12.38 per share and a revenue of $26.96 billion, indicating changes of +3.69% and +5.75%, respectively, from the former year.
It is also important to note the recent changes to analyst estimates for McDonald's. These revisions typically reflect the latest short-term business trends, which can change frequently. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.78% lower within the past month. Right now, McDonald's possesses a Zacks Rank of #3 (Hold).
From a valuation perspective, McDonald's is currently exchanging hands at a Forward P/E ratio of 23.73. This signifies a premium in comparison to the average Forward P/E of 20.83 for its industry.
One should further note that MCD currently holds a PEG ratio of 3.17. 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 2.07 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 101, which puts it in the top 41% of all 250+ industries.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained 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.