Back to top

Image: Bigstock

McDonald's (MCD) Stock Moves -1.49%: What You Should Know

Read MoreHide Full Article

McDonald's (MCD - Free Report) closed at $302.84 in the latest trading session, marking a -1.49% move from the prior day. This move was narrower than the S&P 500's daily loss of 2.06%. On the other hand, the Dow registered a loss of 1.76%, and the technology-centric Nasdaq decreased by 2.39%.

Heading into today, shares of the world's biggest hamburger chain had lost 2.78% over the past month, lagging the Retail-Wholesale sector's gain of 5.12% and the S&P 500's gain of 1.63%.

The upcoming earnings release of McDonald's will be of great interest to investors. The company is forecasted to report an EPS of $3, showcasing a 6.01% upward movement from the corresponding quarter of the prior year. Alongside, our most recent consensus estimate is anticipating revenue of $6.82 billion, indicating a 6.73% upward movement from the same quarter last year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $12.09 per share and revenue of $26.68 billion. These totals would mark changes of +3.16% and 0%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for McDonald's. These revisions help to show the ever-changing nature of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, there's been a 0.29% rise in the Zacks Consensus EPS estimate. McDonald's presently features a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that McDonald's has a Forward P/E ratio of 23.13 right now. This indicates a premium in contrast to its industry's Forward P/E of 20.07.

Also, we should mention that MCD has a PEG ratio of 3.05. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Retail - Restaurants was holding an average PEG ratio of 2.16 at yesterday's closing price.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. With its current Zacks Industry Rank of 202, this industry ranks in the bottom 18% of all industries, numbering over 250.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow MCD in the coming trading sessions, be sure to utilize Zacks.com.


See More Zacks Research for These Tickers


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


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

Published in