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

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The latest trading session saw McDonald's (MCD - Free Report) ending at $309.84, denoting a +1.57% adjustment from its last day's close. The stock exceeded the S&P 500, which registered a gain of 0.77% for the day. Meanwhile, the Dow experienced a rise of 0.47%, and the technology-dominated Nasdaq saw an increase of 0.87%.

The the stock of world's biggest hamburger chain has risen by 2.87% in the past month, lagging the Retail-Wholesale sector's gain of 5.56% and the S&P 500's gain of 4.87%.

Market participants will be closely following the financial results of McDonald's in its upcoming release. The company's earnings per share (EPS) are projected to be $3.15, reflecting a 1.25% decrease from the same quarter last year. Meanwhile, our latest consensus estimate is calling for revenue of $6.76 billion, up 1.05% from the prior-year quarter.

For the full year, the Zacks Consensus Estimates are projecting earnings of $11.71 per share and revenue of $26.04 billion, which would represent changes of -1.93% and +2.15%, respectively, from the prior year.

Investors should also take note of any recent adjustments to analyst estimates for McDonald's. Such recent modifications usually signify the changing landscape of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.36% higher. At present, McDonald's boasts a Zacks Rank of #3 (Hold).

With respect to valuation, McDonald's is currently being traded at a Forward P/E ratio of 26.05. This signifies a premium in comparison to the average Forward P/E of 22.22 for its industry.

Meanwhile, MCD's PEG ratio is currently 4.06. 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. Retail - Restaurants stocks are, on average, holding a PEG ratio of 2.12 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 151, which puts it in the bottom 41% of all 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.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.


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