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McDonald's (MCD) Stock Sinks As Market Gains: What You Should Know

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McDonald's (MCD - Free Report) closed at $191.70 in the latest trading session, marking a -0.08% move from the prior day. This change lagged the S&P 500's 0.05% gain on the day. At the same time, the Dow added 0.26%, and the tech-heavy Nasdaq gained 0.3%.

Heading into today, shares of the world's biggest hamburger chain had gained 4.29% over the past month, outpacing the Retail-Wholesale sector's gain of 4.01% and the S&P 500's gain of 3.08% in that time.

MCD will be looking to display strength as it nears its next earnings release, which is expected to be April 30, 2019. In that report, analysts expect MCD to post earnings of $1.74 per share. This would mark a year-over-year decline of 2.79%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.95 billion, down 3.71% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $8.11 per share and revenue of $20.90 billion. These totals would mark changes of +2.66% and -0.6%, respectively, from last year.

Any recent changes to analyst estimates for MCD should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.47% lower. MCD is currently a Zacks Rank #3 (Hold).

Digging into valuation, MCD currently has a Forward P/E ratio of 23.65. Its industry sports an average Forward P/E of 21.92, so we one might conclude that MCD is trading at a premium comparatively.

Meanwhile, MCD's PEG ratio is currently 2.69. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Retail - Restaurants was holding an average PEG ratio of 2.02 at yesterday's closing price.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 154, which puts it in the bottom 40% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.



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