In the latest trading session, McDonald's (MCD) closed at $222.37, marking a +0.82% move from the previous day. This change outpaced the S&P 500's 0.52% gain on the day. Elsewhere, the Dow gained 0.01%, while the tech-heavy Nasdaq added 1.21%.
Coming into today, shares of the world's biggest hamburger chain had gained 5.7% in the past month. In that same time, the Retail-Wholesale sector gained 1.57%, while the S&P 500 gained 0.49%.
MCD will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.82, down 13.74% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $5.24 billion, down 3.52% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $5.86 per share and revenue of $19.05 billion, which would represent changes of -25.26% and -9.6%, respectively, from the prior year.
Any recent changes to analyst estimates for MCD should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
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 0.3% higher. MCD currently has a Zacks Rank of #3 (Hold).
Looking at its valuation, MCD is holding a Forward P/E ratio of 37.67. For comparison, its industry has an average Forward P/E of 34.03, which means MCD is trading at a premium to the group.
We can also see that MCD currently has a PEG ratio of 4.9. 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 3.85 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 92, which puts it in the top 37% 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.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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