McDonald's (MCD) closed the most recent trading day at $284.54, moving -1.35% from the previous trading session. This change lagged the S&P 500's 0.24% gain on the day. Meanwhile, the Dow gained 0.03%, and the Nasdaq, a tech-heavy index, added 5.73%.
Heading into today, shares of the world's biggest hamburger chain had lost 2.78% over the past month, lagging the Retail-Wholesale sector's gain of 3.86% and the S&P 500's gain of 3.56% in that time.
McDonald's will be looking to display strength as it nears its next earnings release. On that day, McDonald's is projected to report earnings of $2.75 per share, which would represent year-over-year growth of 7.84%. Our most recent consensus estimate is calling for quarterly revenue of $6.21 billion, up 8.66% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $11.04 per share and revenue of $24.96 billion. These totals would mark changes of +9.31% and +7.69%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for McDonald's. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
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.
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. Over the past month, the Zacks Consensus EPS estimate has moved 0.64% higher. McDonald's is holding a Zacks Rank of #2 (Buy) right now.
In terms of valuation, McDonald's is currently trading at a Forward P/E ratio of 26.12. This represents a premium compared to its industry's average Forward P/E of 22.83.
It is also worth noting that MCD currently has a PEG ratio of 3.04. 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 industry currently had an average PEG ratio of 1.96 as of yesterday's close.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 53, which puts it in the top 22% 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.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
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