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McDonald's (MCD) closed at $297.71 in the latest trading session, marking a +0.37% move from the prior day. The stock trailed the S&P 500, which registered a daily gain of 0.38%. Elsewhere, the Dow lost 0.25%, while the tech-heavy Nasdaq added 1.24%.
Heading into today, shares of the world's biggest hamburger chain had gained 1.36% over the past month, lagging the Retail-Wholesale sector's gain of 4.26% and outpacing the S&P 500's gain of 1.17% in that time.
Analysts and investors alike will be keeping a close eye on the performance of McDonald's in its upcoming earnings disclosure. The company is predicted to post an EPS of $2.86, indicating a 3.05% decline compared to the equivalent quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6.52 billion, up 1.84% from the year-ago period.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $11.75 per share and a revenue of $26.04 billion, signifying shifts of -1.59% and +2.16%, respectively, from the last year.
It is also important to note the recent changes to analyst estimates for McDonald's. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.13% decrease. As of now, McDonald's holds a Zacks Rank of #3 (Hold).
In terms of valuation, McDonald's is currently trading at a Forward P/E ratio of 25.24. This denotes no noticeable deviation relative to the industry's average Forward P/E of 25.24.
We can additionally observe that MCD currently boasts a PEG ratio of 3.95. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Retail - Restaurants stocks are, on average, holding a PEG ratio of 2.35 based on yesterday's closing prices.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 142, finds itself in the bottom 44% echelons of all 250+ industries.