McDonald’s Corporation (MCD) saw its stock rise to $309.84, marking a 1.57% increase in the latest trading session. This performance outpaced the S&P 500, which gained 0.77%, while the Dow Jones Industrial Average rose by 0.47%, and the Nasdaq increased by 0.87%.
Over the past month, McDonald’s shares have increased by 2.87%.
However, this growth lags behind the Retail-Wholesale sector’s rise of 5.56% and the S&P 500’s gain of 4.87%.
Investors are anticipating McDonald’s upcoming financial results, with earnings per share (EPS) expected to be $3.15. This figure represents a 1.25% decline compared to the same quarter last year. Revenue is projected at $6.76 billion, reflecting a modest increase of 1.05% from the previous year.
For the full year, Zacks Consensus Estimates predict an EPS of $11.71 and revenue of $26.04 billion, indicating a decline of 1.93% in earnings but a revenue increase of 2.15% compared to last year.
Analysts have recently adjusted their estimates for McDonald’s, which often signals shifts in business trends. Positive changes typically indicate optimism about the company’s profitability.
Research shows that these estimate changes correlate with stock price movements. Zacks has developed a ranking system to leverage this relationship, providing ratings from #1 (Strong Buy) to #5 (Strong Sell). Historically, stocks rated #1 have yielded an average annual return of +25% since 1988. In the last month, the consensus EPS estimate for McDonald’s has risen by 0.36%, and the stock currently holds a Zacks Rank of #3 (Hold).
In terms of valuation, McDonald’s has a Forward P/E ratio of 26.05, which is higher than the industry average of 22.22. The company’s PEG ratio stands at 4.06, compared to an industry average of 2.12.
The Retail-Restaurants industry falls within the broader Retail-Wholesale sector and currently holds a Zacks Industry Rank of 151, placing it in the bottom 41% of over 250 industries analyzed.
The Zacks Industry Rank assesses the strength of various industry groups based on individual stock rankings within those groups.
Historically, industries rated in the top half outperform those in the bottom half by a factor of two to one.
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