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McDonald's (MCD) Stock Sinks As Market Gains: Here's Why
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In the latest trading session, McDonald's (MCD - Free Report) closed at $291.27, marking a -0.01% move from the previous day. This change lagged the S&P 500's 0.45% gain on the day. Meanwhile, the Dow lost 0.23%, and the Nasdaq, a tech-heavy index, added 0.84%.
The the stock of world's biggest hamburger chain has risen by 8.1% in the past month, leading the Retail-Wholesale sector's gain of 5.18% and the S&P 500's gain of 2.54%.
The upcoming earnings release of McDonald's will be of great interest to investors. The company is expected to report EPS of $3.14, down 1.57% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $6.75 billion, up 0.84% from the prior-year quarter.
For the full year, the Zacks Consensus Estimates are projecting earnings of $11.67 per share and revenue of $26.01 billion, which would represent changes of -2.26% and +2.04%, respectively, from the prior year.
Any recent changes to analyst estimates for McDonald's should also be noted by investors. 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 demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, there's been a 0.25% fall in the Zacks Consensus EPS estimate. McDonald's is currently a Zacks Rank #4 (Sell).
Looking at its valuation, McDonald's is holding a Forward P/E ratio of 24.97. This indicates a premium in contrast to its industry's Forward P/E of 20.24.
It is also worth noting that MCD currently has a PEG ratio of 3.9. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. As of the close of trade yesterday, the Retail - Restaurants industry held an average PEG ratio of 2.19.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. At present, this industry carries a Zacks Industry Rank of 163, placing it within the bottom 36% of over 250 industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. 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 (MCD) Stock Sinks As Market Gains: Here's Why
In the latest trading session, McDonald's (MCD - Free Report) closed at $291.27, marking a -0.01% move from the previous day. This change lagged the S&P 500's 0.45% gain on the day. Meanwhile, the Dow lost 0.23%, and the Nasdaq, a tech-heavy index, added 0.84%.
The the stock of world's biggest hamburger chain has risen by 8.1% in the past month, leading the Retail-Wholesale sector's gain of 5.18% and the S&P 500's gain of 2.54%.
The upcoming earnings release of McDonald's will be of great interest to investors. The company is expected to report EPS of $3.14, down 1.57% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $6.75 billion, up 0.84% from the prior-year quarter.
For the full year, the Zacks Consensus Estimates are projecting earnings of $11.67 per share and revenue of $26.01 billion, which would represent changes of -2.26% and +2.04%, respectively, from the prior year.
Any recent changes to analyst estimates for McDonald's should also be noted by investors. 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 demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, there's been a 0.25% fall in the Zacks Consensus EPS estimate. McDonald's is currently a Zacks Rank #4 (Sell).
Looking at its valuation, McDonald's is holding a Forward P/E ratio of 24.97. This indicates a premium in contrast to its industry's Forward P/E of 20.24.
It is also worth noting that MCD currently has a PEG ratio of 3.9. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. As of the close of trade yesterday, the Retail - Restaurants industry held an average PEG ratio of 2.19.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. At present, this industry carries a Zacks Industry Rank of 163, placing it within the bottom 36% of over 250 industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. 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.