In the latest market close, McDonald's (MCD) reached $283.63, with a +0.47% movement compared to the previous day. The stock's performance was ahead of the S&P 500's daily gain of 0.16%. Elsewhere, the Dow gained 0.86%, while the tech-heavy Nasdaq lost 0.38%.
Shares of the world's biggest hamburger chain witnessed a loss of 4.82% over the previous month, trailing the performance of the Retail-Wholesale sector with its loss of 4.64% and the S&P 500's loss of 2.2%.
The investment community will be closely monitoring the performance of McDonald's in its forthcoming earnings report. The company's earnings per share (EPS) are projected to be $2.84, reflecting a 3.73% decrease from the same quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.5 billion, up 1.51% from the year-ago period.
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. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical 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 0.35% fall in the Zacks Consensus EPS estimate. McDonald's is holding a Zacks Rank of #3 (Hold) right now.
Digging into valuation, McDonald's currently has a Forward P/E ratio of 22.65. This expresses a discount compared to the average Forward P/E of 23.01 of its industry.
Also, we should mention that MCD has a PEG ratio of 3.67. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. MCD's industry had an average PEG ratio of 2.03 as of yesterday's close.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. Currently, this industry holds a Zacks Industry Rank of 137, positioning it in the bottom 46% of all 250+ industries.
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.
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