McDonald’s (MCD) closed at $206.27 in the latest trading session, marking a -1.32% move from the prior day. This change was narrower than the S&P 500’s daily loss of 1.79%. Elsewhere, the Dow lost 1.86%, while the tech-heavy Nasdaq lost 1.56%.
Coming into today, shares of the world’s biggest hamburger chain had lost 3.74% in the past month. In that same time, the Retail-Wholesale sector lost 1.17%, while the S&P 500 gained 0.72%.
Investors will be hoping for strength from MCD as it approaches its next earnings release, which is expected to be October 22, 2019. On that day, MCD is projected to report earnings of $2.22 per share, which would represent year-over-year growth of 5.71%. Meanwhile, our latest consensus estimate is calling for revenue of $5.50 billion, up 2.41% from the prior-year quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $8 per share and revenue of $21.13 billion, which would represent changes of +1.27% and +0.5%, respectively, from the prior year.
Investors might also notice recent changes to analyst estimates for MCD. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.08% lower. MCD is currently a Zacks Rank #3 (Hold).
Valuation is also important, so investors should note that MCD has a Forward P/E ratio of 26.13 right now. Its industry sports an average Forward P/E of 22.72, so we one might conclude that MCD is trading at a premium comparatively.
Also, we should mention that MCD has a PEG ratio of 3.11. 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. MCD’s industry had an average PEG ratio of 2.08 as of yesterday’s close.
The Retail – Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 113, putting it in the top 45% 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.
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