In the latest close session, McDonald’s (MCD) was down 4.81% at $238.32. This change lagged the S&P 500’s daily loss of 0.76%. At the same time, the Dow lost 0.68%, and the tech-heavy Nasdaq lost 1.13%.
Prior to today’s trading, shares of the world’s biggest hamburger chain had lost 6.62% lagged the Retail-Wholesale sector’s loss of 3.45% and the S&P 500’s gain of 1.26%.
Market participants will be closely following the financial results of McDonald’s in its upcoming release. The company is forecasted to report an EPS of $3.39, showcasing a 5.28% upward movement from the corresponding quarter of the prior year. Alongside, our most recent consensus estimate is anticipating revenue of $7.29 billion, indicating a 2.98% upward movement from the same quarter last year.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $12.88 per share and a revenue of $28.18 billion, signifying shifts of +5.57% and +4.81%, respectively, from the last year.
Investors should also pay attention to any latest changes in analyst estimates for McDonald’s. Recent revisions tend to reflect the latest near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To exploit this, we’ve formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.03% lower. At present, McDonald’s boasts a Zacks Rank of #3 (Hold).
In terms of valuation, McDonald’s is currently trading at a Forward P/E ratio of 19.44. This valuation marks a discount compared to its industry average Forward P/E of 21.17.
It’s also important to note that MCD currently trades at a PEG ratio of 2.71. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company’s expected earnings growth rate into account. The average PEG ratio for the Retail – Restaurants industry stood at 1.73 at the close of the market yesterday.
The Retail – Restaurants industry is part of the Retail-Wholesale sector. At present, this industry carries a Zacks Industry Rank of 162, placing it within the bottom 35% of over 250 industries.
