Markets

McDonald's (MCD) Stock Moves -1.47%: What You Should Know

McDonald's (MCD) closed the most recent trading day at $226, moving -1.47% from the previous trading session. This change was narrower than the S&P 500's daily loss of 1.63%. Elsewhere, the Dow lost 1.44%, while the tech-heavy Nasdaq lost 1.65%.

Coming into today, shares of the world's biggest hamburger chain had gained 3.05% in the past month. In that same time, the Retail-Wholesale sector gained 6.28%, while the S&P 500 gained 2.86%.

MCD will be looking to display strength as it nears its next earnings release, which is expected to be November 9, 2020. The company is expected to report EPS of $1.91, down 9.48% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $5.34 billion, down 1.7% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.98 per share and revenue of $19.23 billion. These totals would mark changes of -23.72% and -8.75%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for MCD. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 2.09% higher. MCD is holding a Zacks Rank of #2 (Buy) right now.

Valuation is also important, so investors should note that MCD has a Forward P/E ratio of 38.37 right now. For comparison, its industry has an average Forward P/E of 31.51, which means MCD is trading at a premium to the group.

Investors should also note that MCD has a PEG ratio of 5.31 right now. 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 4.34 as of yesterday's close.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 83, putting it in the top 33% 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.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
McDonalds Corporation (MCD): Free Stock Analysis Report
 
To read this article on Zacks.com click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More