Back to top

Image: Bigstock

The Best Options Trade for McDonald's (MCD) Earnings

Read MoreHide Full Article

On Friday, October, 20th, McDonald’s (MCD - Free Report) will release its third quarter earnings results before the bell. The company is a Zacks Rank 2 (Buy), and have a Value, Growth, and Momentum score of B.

Dave will look at McDonald’s past earnings, take a look at what is currently going on with the company, and give us his thoughts on their upcoming earnings announcement.

Furthermore, Dave will uncover some potential options trades for investors looking to make a play on McDonald’s ahead of earnings.

McDonald’s in Focus

McDonald's Corporation develops, operates, franchises and services a worldwide system of restaurants that prepare, assemble, package and sell a limited menu of value-priced foods. The company operates primarily in the quick-service hamburger restaurant business. All restaurants are operated by the company or, under the terms of franchise arrangements, by franchisees who are independent third parties, or by affiliates operating under joint-venture agreements between the company and local business people.

McDonald’s is expected to report earnings of $1.48 per share according to the Zacks Consensus Estimate. Last quarter they beat earnings expectations by 5.07% at $1.45 per share, beating estimates of $1.38 per share.

MCDONALDS CORP Price and EPS Surprise

MCDONALDS CORP Price and EPS Surprise | MCDONALDS CORP Quote

McDonald’s is trading around $111 a share, and they are off from their 52-week high of $131.96 per share, and they have an average earnings beat of 6.35%.

McDonald’s is tied to the retail-restaurants sector, and their industry is in the bottom 38%. McDonald’s has been facing many headwinds in recent years from changing consumer’s preferences to new competitors. Consumers in recent years have become more health conscious in regards to fresh ingredients over processed foods. Therefore, competitors such as Chipotle Mexican Grill (CMG - Free Report) and Shake Shack (SHAK - Free Report) have grown rapidly.

Despite tough competition and changing consumer demands for fast food, but the roll out of all day breakfast has increased sales across their stores. Furthermore, McDonald’s simplifying their menu to focus on their roots by eliminating items such as wraps has potentially benefited the company as well.

Bottom Line

How should investors play McDonald’s ahead of their earnings report? For insights on the best options trades, make sure you are subscribe to Live Trader to see Dave Bartosiak at 1:30 pm on Wednesday.

 Confidential from Zacks

Would you like to access Zacks' 2 best trades that are not available to the public? Zacks Executive VP, Steve Reitmeister knows which of our experts has the hottest hand and when key trades are about to be triggered. Today he is prepared to pass the Best of Our Best along to you. See these timely buys now >>


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


McDonald's Corporation (MCD) - free report >>

Chipotle Mexican Grill, Inc. (CMG) - free report >>

Shake Shack, Inc. (SHAK) - free report >>