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

McDonald's (MCD) closed at $194.21 in the latest trading session, marking a -0.05% move from the prior day. This change lagged the S&P 500's 0.15% gain on the day. Elsewhere, the Dow gained 0.1%, while the tech-heavy Nasdaq added 0.05%.

Prior to today's trading, shares of the world's biggest hamburger chain had gained 0.07% over the past month. This has lagged the Retail-Wholesale sector's gain of 0.21% and the S&P 500's gain of 1.32% in that time.

Wall Street will be looking for positivity from MCD as it approaches its next earnings report date. In that report, analysts expect MCD to post earnings of $1.96 per share. This would mark a year-over-year decline of 0.51%. Meanwhile, our latest consensus estimate is calling for revenue of $5.30 billion, up 2.64% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.84 per share and revenue of $21.03 billion. These totals would mark changes of -0.76% and +0.04%, respectively, from last 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. 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. 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 0.13% lower. MCD is currently sporting a Zacks Rank of #4 (Sell).

Looking at its valuation, MCD is holding a Forward P/E ratio of 24.79. This represents a premium compared to its industry's average Forward P/E of 23.65.

Also, we should mention that MCD has a PEG ratio of 2.94. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Retail - Restaurants industry currently had an average PEG ratio of 2.23 as of yesterday's close.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 56, putting 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.

You can find more information on all of these metrics, and much more, on Zacks.com.

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