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McDonald's (MCD) Rises Higher Than Market: Key Facts

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McDonald's (MCD - Free Report) closed at $291.42 in the latest trading session, marking a +0.79% move from the prior day. The stock outperformed the S&P 500, which registered a daily gain of 0.46%. Elsewhere, the Dow gained 0.48%, while the tech-heavy Nasdaq added 0.7%.

Shares of the world's biggest hamburger chain witnessed a gain of 7.41% over the previous month, beating the performance of the Retail-Wholesale sector with its gain of 4.47% and the S&P 500's gain of 4.85%.

The upcoming earnings release of McDonald's will be of great interest to investors. It is anticipated that the company will report an EPS of $2.81, marking an 8.49% rise compared to the same quarter of the previous year. Meanwhile, our latest consensus estimate is calling for revenue of $6.48 billion, up 9.34% from the prior-year quarter.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $11.76 per share and a revenue of $25.55 billion, representing changes of +16.44% and +10.22%, respectively, from the prior year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for McDonald's. Such recent modifications usually signify the changing landscape of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.26% higher. McDonald's is currently a Zacks Rank #3 (Hold).

Investors should also note McDonald's's current valuation metrics, including its Forward P/E ratio of 24.58. This represents a premium compared to its industry's average Forward P/E of 21.45.

It is also worth noting that MCD currently has a PEG ratio of 2.7. 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 45, which puts it in the top 18% of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.


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