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MCD

McDonald’s reports Q4 numbers January 23

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What's Happening

Fast food giant McDonald's ( MCD ) is scheduled to report its fourth-quarter numbers before the market open on January 23. The company is forecast to report earnings of $1.41 per share, up from $1.28 during the same period last year. The stock has gained a modest 3.8% over the last year.

Technical Analysis

MCD was recently trading at $122.60, just $9.36 below its 12-month high and $12.27 above its 12-month low. Overall technical indicators for MCD are bullish, and the stock is in a weak upward trend. The stock has recent support above $118.50, and recent resistance below $123.00. Of the 23 analysts who cover the stock, seven rate it a "strong buy", one rates it a "buy", 13 rate it a "hold", one rates it a "sell", and one rates it a "strong sell". The stock receives S&P Capital IQ's 4 STARS "Buy" ranking.

Analyst's Thoughts

After a fairly long struggle to grow U.S. sales, fast food king McDonalds has managed to figure out a way to grow sales domestically, which is why sentiment has turned bullish on the company. The street has a higher whisper number of $1.46 for the quarter, and if the quarterly number does hit that whisper number the stock should build on gains made following the company's last quarterly report, but U.S. sales growth will be the focus. The company's move to add all-day breakfast to its menu is the prime reason why U.S. sales have begun to rise again, and now that U.S. sales have started to rise, Wall Street will expect to see that trend continue moving forward. Pay attention to the overall quarterly numbers, but the real focus should be on U.S. sales, since that will be the metric that will really determines the stock's direction following the report.

Stock Only Trade

Bullish Trade

If you want a bullish hedged trade on the stock, consider a June 100/105 bull-put credit spread for a 35-cent credit. That's a potential 7.5% return (18.7% annualized*) and the stock would have to fall 14.0% to cause a problem.

Bearish Trade

If you want to take a bearish stance on the stock at this time, consider a June 135/140 bear-call credit spread for a $0.40 credit. That's a potential 8.7% return (21.6% annualized*) and the stock would have to rise 10.4% to cause a problem.

Covered Call Trade

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

Originally published on InvestorsObserver.com


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

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