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McDonald's (MCD) Gains But Lags Market: What You Should Know
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McDonald's (MCD - Free Report) closed at $265.95 in the latest trading session, marking a +0.38% move from the prior day. The stock lagged the S&P 500's daily gain of 0.62%. At the same time, the Dow added 0.55%, and the tech-heavy Nasdaq lost 0.03%.
Coming into today, shares of the world's biggest hamburger chain had gained 3.44% in the past month. In that same time, the Retail-Wholesale sector lost 4.49%, while the S&P 500 gained 0.87%.
Investors will be hoping for strength from McDonald's as it approaches its next earnings release. On that day, McDonald's is projected to report earnings of $2.32 per share, which would represent year-over-year growth of 36.47%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.03 billion, up 13.47% from the year-ago period.
MCD's full-year Zacks Consensus Estimates are calling for earnings of $9.42 per share and revenue of $23.22 billion. These results would represent year-over-year changes of +55.7% and +20.9%, respectively.
It is also important to note the recent changes to analyst estimates for McDonald's. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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, 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 0.35% higher. McDonald's is currently a Zacks Rank #3 (Hold).
Valuation is also important, so investors should note that McDonald's has a Forward P/E ratio of 28.24 right now. For comparison, its industry has an average Forward P/E of 24.17, which means McDonald's is trading at a premium to the group.
Also, we should mention that MCD has a PEG ratio of 2.47. 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 Retail - Restaurants was holding an average PEG ratio of 2.09 at yesterday's closing price.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 214, which puts it in the bottom 16% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our 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.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
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McDonald's (MCD) Gains But Lags Market: What You Should Know
McDonald's (MCD - Free Report) closed at $265.95 in the latest trading session, marking a +0.38% move from the prior day. The stock lagged the S&P 500's daily gain of 0.62%. At the same time, the Dow added 0.55%, and the tech-heavy Nasdaq lost 0.03%.
Coming into today, shares of the world's biggest hamburger chain had gained 3.44% in the past month. In that same time, the Retail-Wholesale sector lost 4.49%, while the S&P 500 gained 0.87%.
Investors will be hoping for strength from McDonald's as it approaches its next earnings release. On that day, McDonald's is projected to report earnings of $2.32 per share, which would represent year-over-year growth of 36.47%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.03 billion, up 13.47% from the year-ago period.
MCD's full-year Zacks Consensus Estimates are calling for earnings of $9.42 per share and revenue of $23.22 billion. These results would represent year-over-year changes of +55.7% and +20.9%, respectively.
It is also important to note the recent changes to analyst estimates for McDonald's. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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, 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 0.35% higher. McDonald's is currently a Zacks Rank #3 (Hold).
Valuation is also important, so investors should note that McDonald's has a Forward P/E ratio of 28.24 right now. For comparison, its industry has an average Forward P/E of 24.17, which means McDonald's is trading at a premium to the group.
Also, we should mention that MCD has a PEG ratio of 2.47. 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 Retail - Restaurants was holding an average PEG ratio of 2.09 at yesterday's closing price.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 214, which puts it in the bottom 16% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our 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.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.