Yahoo Finance Why McDonald's (MCD) Outpaced the Stock Market Today
In the latest market close, McDonald's (MCD) reached $259.75, with a +0.33% movement compared to the previous day. This move outpaced the S&P 500's daily gain of 0.11%. At the same time, the Dow lost 0.3%, and the tech-heavy Nasdaq gained 0.56%.
Heading into today, shares of the world's biggest hamburger chain had lost 4.23% over the past month, lagging the Retail-Wholesale sector's gain of 3.26% and the S&P 500's gain of 5.06% in that time.
The upcoming earnings release of McDonald's will be of great interest to investors. The company is expected to report EPS of $3.10, down 2.21% from the prior-year quarter. In the meantime, our current consensus estimate forecasts the revenue to be $6.69 billion, indicating a 2.89% growth compared to the corresponding quarter of the prior year.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $12.17 per share and revenue of $26.62 billion, indicating changes of +1.93% and +4.41%, respectively, compared to the previous 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. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.
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.
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 past month, the Zacks Consensus EPS estimate has shifted 0.2% downward. McDonald's is holding a Zacks Rank of #3 (Hold) right now.
Investors should also note McDonald's's current valuation metrics, including its Forward P/E ratio of 21.27. For comparison, its industry has an average Forward P/E of 18.95, which means McDonald's is trading at a premium to the group.
We can also see that MCD currently has a PEG ratio of 2.92. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. As the market closed yesterday, the Retail - Restaurants industry was having an average PEG ratio of 1.75.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. With its current Zacks Industry Rank of 163, this industry ranks in the bottom 36% of all industries, numbering over 250.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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McDonald's Corporation (MCD) : Free Stock Analysis Report
