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McDonald's (MCD) closed at $235.19 in the latest trading session, marking a -1.55% move from the prior day. This change was narrower than the S&P 500's 3.25% loss on the day. Elsewhere, the Dow lost 2.42%, while the tech-heavy Nasdaq lost 0.49%.
Heading into today, shares of the world's biggest hamburger chain had gained 3.4% over the past month, outpacing the Retail-Wholesale sector's loss of 4.53% and the S&P 500's loss of 5.62% in that time.
Wall Street will be looking for positivity from McDonald's as it approaches its next earnings report date. In that report, analysts expect McDonald's to post earnings of $2.46 per share. This would mark year-over-year growth of 3.8%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.85 billion, down 0.63% from the year-ago period.
MCD's full-year Zacks Consensus Estimates are calling for earnings of $9.78 per share and revenue of $23.45 billion. These results would represent year-over-year changes of +5.39% and +0.98%, respectively.
Investors should also note any recent changes to analyst estimates for McDonald's. These recent revisions tend to reflect the evolving nature of short-term business trends. 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. Within the past 30 days, our consensus EPS projection has moved 0.21% lower. McDonald's is currently a Zacks Rank #3 (Hold).
Digging into valuation, McDonald's currently has a Forward P/E ratio of 24.43. Its industry sports an average Forward P/E of 17.65, so we one might conclude that McDonald's is trading at a premium comparatively.
Also, we should mention that MCD has a PEG ratio of 3.05. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Retail - Restaurants industry currently had an average PEG ratio of 1.74 as of yesterday's close.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 208, putting it in the bottom 18% 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.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.