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McDonald's (MCD) closed at $242.16 in the latest trading session, marking a -1.4% move from the prior day. This move was narrower than the S&P 500's daily loss of 2.38%. Elsewhere, the Dow lost 1.94%, while the tech-heavy Nasdaq lost 0.64%.
Heading into today, shares of the world's biggest hamburger chain had gained 0.48% over the past month, outpacing the Retail-Wholesale sector's loss of 25.8% and the S&P 500's loss of 0.07% in that time.
Investors will be hoping for strength from McDonald's as it approaches its next earnings release. On that day, McDonald's is projected to report earnings of $2.46 per share, which would represent year-over-year growth of 3.8%. Our most recent consensus estimate is calling for quarterly revenue of $5.85 billion, down 0.63% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $9.80 per share and revenue of $23.45 billion. These totals would mark changes of +5.6% and +0.98%, respectively, from last year.
Investors should also note any recent changes to analyst estimates for McDonald's. 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
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. The Zacks Consensus EPS estimate has moved 0.02% lower within the past month. McDonald's currently has a Zacks Rank of #3 (Hold).
Digging into valuation, McDonald's currently has a Forward P/E ratio of 25.07. For comparison, its industry has an average Forward P/E of 20.73, which means McDonald's is trading at a premium to the group.
Investors should also note that MCD has a PEG ratio of 3.13 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 1.84 as of yesterday's close.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 194, putting it in the bottom 24% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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McDonald's Corporation (MCD) : Free Stock Analysis Report
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