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In the latest trading session, McDonald's (MCD) closed at $253.47, marking a -0.44% move from the previous day. This change lagged the S&P 500's 0.99% gain on the day. Meanwhile, the Dow gained 0.51%, and the Nasdaq, a tech-heavy index, lost 0.38%.
Prior to today's trading, shares of the world's biggest hamburger chain had gained 4.74% over the past month. This has lagged the Retail-Wholesale sector's gain of 10.59% and the S&P 500's gain of 7.91% in that time.
Investors will be hoping for strength from McDonald's as it approaches its next earnings release, which is expected to be July 26, 2022. The company is expected to report EPS of $2.46, up 3.8% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $5.88 billion, down 0.09% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $9.75 per share and revenue of $23.41 billion. These totals would mark changes of +5.06% and +0.8%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for McDonald's. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.05% lower. McDonald's is currently a Zacks Rank #3 (Hold).
Digging into valuation, McDonald's currently has a Forward P/E ratio of 26.1. For comparison, its industry has an average Forward P/E of 18.08, which means McDonald's is trading at a premium to the group.
Also, we should mention that MCD has a PEG ratio of 3.2. 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 1.9 based on yesterday's closing prices.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 201, which puts it in the bottom 21% 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.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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McDonald's Corporation (MCD) : Free Stock Analysis Report
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