In the latest trading session, McDonald's (MCD) closed at $189.39, marking a +1% move from the previous day. This change outpaced the S&P 500's 0.36% gain on the day. At the same time, the Dow added 0.36%, and the tech-heavy Nasdaq gained 0.34%.
Heading into today, shares of the world's biggest hamburger chain had gained 2.26% over the past month, outpacing the Retail-Wholesale sector's gain of 1.5% and the S&P 500's gain of 0.64% in that time.
MCD will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.76, down 1.68% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.95 billion, down 3.59% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $8.12 per share and revenue of $20.92 billion, which would represent changes of +2.78% and -0.52%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for MCD. 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. 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.75% lower. MCD currently has a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that MCD has a Forward P/E ratio of 23.09 right now. Its industry sports an average Forward P/E of 21.56, so we one might conclude that MCD is trading at a premium comparatively.
Meanwhile, MCD's PEG ratio is currently 2.63. 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 2.06 as of yesterday's close.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 153, putting it in the bottom 40% 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.
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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