In the latest trading session, McDonald's (MCD) closed at $207.27, marking a -0.52% move from the previous day. This change lagged the S&P 500's daily loss of 0.29%. Elsewhere, the Dow lost 0.46%, while the tech-heavy Nasdaq lost 0.27%.
Coming into today, shares of the world's biggest hamburger chain had gained 6.13% in the past month. In that same time, the Retail-Wholesale sector gained 5.03%, while the S&P 500 gained 4.56%.
Investors will be hoping for strength from MCD as it approaches its next earnings release. The company is expected to report EPS of $1.96, down 0.51% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $5.30 billion, up 2.69% from the prior-year quarter.
It is also important to note the recent changes to analyst estimates for MCD. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.07% lower. MCD is holding a Zacks Rank of #3 (Hold) right now.
Investors should also note MCD's current valuation metrics, including its Forward P/E ratio of 24.6. For comparison, its industry has an average Forward P/E of 21.86, which means MCD is trading at a premium to the group.
Investors should also note that MCD has a PEG ratio of 2.92 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. Retail - Restaurants stocks are, on average, holding a PEG ratio of 2.09 based on yesterday's closing prices.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 81, putting it in the top 32% 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.
To follow MCD in the coming trading sessions, be sure to utilize Zacks.com.