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Here's Why McDonald's (MCD) Fell More Than Broader Market
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McDonald's (MCD - Free Report) ended the recent trading session at $230.94, demonstrating a -1.3% change from the preceding day's closing price. The stock's performance was behind the S&P 500's daily loss of 0.25%. Meanwhile, the Dow lost 0.86%, and the Nasdaq, a tech-heavy index, added 0.24%.
Heading into today, shares of the world's biggest hamburger chain had lost 10.39% over the past month, lagging the Retail-Wholesale sector's loss of 6.54% and the S&P 500's loss of 0.42%.
Analysts and investors alike will be keeping a close eye on the performance of McDonald's in its upcoming earnings disclosure. The company's upcoming EPS is projected at $3.37, signifying a 4.66% increase compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $7.28 billion, reflecting a 2.88% rise from the equivalent quarter last year.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $12.85 per share and a revenue of $28.19 billion, representing changes of +5.33% and +4.85%, respectively, from the prior year.
Investors might also notice recent changes to analyst estimates for McDonald's. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. 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, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.25% lower. McDonald's is currently a Zacks Rank #3 (Hold).
In terms of valuation, McDonald's is currently trading at a Forward P/E ratio of 18.21. This denotes a discount relative to the industry average Forward P/E of 20.7.
Meanwhile, MCD's PEG ratio is currently 2.61. 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 average PEG ratio for the Retail - Restaurants industry stood at 1.76 at the close of the market yesterday.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 172, finds itself in the bottom 31% echelons of all 250+ industries.
The Zacks Industry Rank gauges the strength of our 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
View the Zacks #1 Rank List
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Here's Why McDonald's (MCD) Fell More Than Broader Market
McDonald's (MCD - Free Report) ended the recent trading session at $230.94, demonstrating a -1.3% change from the preceding day's closing price. The stock's performance was behind the S&P 500's daily loss of 0.25%. Meanwhile, the Dow lost 0.86%, and the Nasdaq, a tech-heavy index, added 0.24%.
Heading into today, shares of the world's biggest hamburger chain had lost 10.39% over the past month, lagging the Retail-Wholesale sector's loss of 6.54% and the S&P 500's loss of 0.42%.
Analysts and investors alike will be keeping a close eye on the performance of McDonald's in its upcoming earnings disclosure. The company's upcoming EPS is projected at $3.37, signifying a 4.66% increase compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $7.28 billion, reflecting a 2.88% rise from the equivalent quarter last year.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $12.85 per share and a revenue of $28.19 billion, representing changes of +5.33% and +4.85%, respectively, from the prior year.
Investors might also notice recent changes to analyst estimates for McDonald's. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. 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, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.25% lower. McDonald's is currently a Zacks Rank #3 (Hold).
In terms of valuation, McDonald's is currently trading at a Forward P/E ratio of 18.21. This denotes a discount relative to the industry average Forward P/E of 20.7.
Meanwhile, MCD's PEG ratio is currently 2.61. 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 average PEG ratio for the Retail - Restaurants industry stood at 1.76 at the close of the market yesterday.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 172, finds itself in the bottom 31% echelons of all 250+ industries.
The Zacks Industry Rank gauges the strength of our 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.
You can find more information on all of these metrics, and much more, on Zacks.com.