In the latest trading session, McDonald's (MCD - Free Report) closed at $205.06, marking a +0.89% move from the previous day. This move outpaced the S&P 500's daily loss of 0.2%. Meanwhile, the Dow lost 0.17%, and the Nasdaq, a tech-heavy index, lost 0.38%.
Coming into today, shares of the world's biggest hamburger chain had gained 2.65% in the past month. In that same time, the Retail-Wholesale sector lost 1.15%, while the S&P 500 gained 0.33%.
MCD will be looking to display strength as it nears its next earnings release. In that report, analysts expect MCD to post earnings of $2.05 per share. This would mark year-over-year growth of 3.02%. Meanwhile, our latest consensus estimate is calling for revenue of $5.30 billion, down 1.02% from the prior-year quarter.
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 typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
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. The Zacks Consensus EPS estimate has moved 0.05% lower within the past month. MCD is currently sporting a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that MCD has a Forward P/E ratio of 25.29 right now. Its industry sports an average Forward P/E of 21.85, so we one might conclude that MCD is trading at a premium comparatively.
It is also worth noting that MCD currently has a PEG ratio of 2.85. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Retail - Restaurants was holding an average PEG ratio of 2.13 at yesterday's closing price.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 108, putting it in the top 43% 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.
You can find more information on all of these metrics, and much more, on Zacks.com.