In the latest close session, McDonald's (MCD) was up +2.61% at $236.90. The stock outpaced the S&P 500's daily loss of 0.47%. Meanwhile, the Dow gained 0.1%, and the Nasdaq, a tech-heavy index, lost 1.25%.
Shares of the world's biggest hamburger chain witnessed a loss of 8.92% over the previous month, trailing the performance of the Retail-Wholesale sector with its loss of 2.73%, and the S&P 500's gain of 1.15%.
The upcoming earnings release of McDonald's will be of great interest to investors. The company's upcoming EPS is projected at $3.37, signifying a 4.66% increase compared to the same quarter of the previous year. Meanwhile, the latest consensus estimate predicts the revenue to be $7.28 billion, indicating a 2.88% increase compared to the same quarter of the previous year.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $12.85 per share and revenue of $28.17 billion. These totals would mark changes of +5.33% and +4.77%, respectively, from last year.
Investors might also notice recent changes to analyst estimates for McDonald's. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Our research suggests that these changes in estimates have a direct relationship with upcoming 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, 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. The Zacks Consensus EPS estimate has moved 0.25% lower within the past month. McDonald's is currently a Zacks Rank #4 (Sell).
Investors should also note McDonald's's current valuation metrics, including its Forward P/E ratio of 17.97. This valuation marks a discount compared to its industry average Forward P/E of 19.95.
Also, we should mention that MCD has a PEG ratio of 2.58. 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 industry currently had an average PEG ratio of 1.74 as of yesterday's close.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. With its current Zacks Industry Rank of 107, this industry ranks in the top 44% of all industries, numbering over 250.
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.
Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.
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McDonald's Corporation (MCD): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).