In the latest trading session, McDonald's (MCD) closed at $219.49, marking a +0.45% move from the previous day. The stock lagged the S&P 500's daily gain of 1.3%. At the same time, the Dow added 1.41%, and the tech-heavy Nasdaq gained 1.75%.
Prior to today's trading, shares of the world's biggest hamburger chain had gained 0.77% over the past month. This has lagged the Retail-Wholesale sector's gain of 3.12% and outpaced the S&P 500's gain of 0.46% 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 $2.22, up 5.71% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.49 billion, up 2.31% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $8.01 per share and revenue of $21.12 billion, which would represent changes of +1.39% and +0.47%, respectively, from the prior year.
It is also important to note the 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. 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 0.01% lower. MCD is currently sporting a Zacks Rank of #3 (Hold).
Digging into valuation, MCD currently has a Forward P/E ratio of 27.29. Its industry sports an average Forward P/E of 22.29, so we one might conclude that MCD is trading at a premium comparatively.
Also, we should mention that MCD has a PEG ratio of 3.25. 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 2.46 as of yesterday's close.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 150, putting it in the bottom 42% 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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