Back to top

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

Read MoreHide Full Article

In the latest trading session, McDonald's (MCD - Free Report) closed at $203.06, marking a +1.46% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.61%. Meanwhile, the Dow gained 0.71%, and the Nasdaq, a tech-heavy index, added 0.53%.

Coming into today, shares of the world's biggest hamburger chain had gained 1.06% in the past month. In that same time, the Retail-Wholesale sector lost 8.25%, while the S&P 500 lost 3.77%.

Wall Street will be looking for positivity from MCD as it approaches its next earnings report date. The company is expected to report EPS of $2.05, up 3.02% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $5.30 billion, down 1.02% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $8.04 per share and revenue of $21 billion, which would represent changes of +1.77% and -0.14%, respectively, from the prior year.

Any recent changes to analyst estimates for MCD should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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. The Zacks Consensus EPS estimate has moved 0.11% lower within the past month. MCD is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, MCD is holding a Forward P/E ratio of 24.9. Its industry sports an average Forward P/E of 21.84, so we one might conclude that MCD is trading at a premium comparatively.

We can also see that MCD currently has a PEG ratio of 2.8. 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. Retail - Restaurants stocks are, on average, holding a PEG ratio of 2.14 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 159, which puts it in the bottom 38% of all 250+ industries.

The Zacks Industry Rank includes is listed in order 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.

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


In-Depth Zacks Research for the Tickers Above


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


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

Published in