In the latest trading session, McDonald’s (MCD) closed at $253.37, a decrease of 0.27% from the previous day’s close. This decline was smaller compared to the S&P 500’s 2.32% drop. Additionally, the Dow fell by 1.25%, and the Nasdaq, which focuses on technology stocks, dropped by 3.64%.
Over the past month, McDonald’s shares have fallen by 1.29%. This performance trails behind the Retail-Wholesale sector, which lost 0.68%, and the S&P 500, which gained 1.79% during the same period.
Investors are eagerly awaiting McDonald’s upcoming earnings report, scheduled for release on July 29, 2024. The company is expected to announce earnings of $3.08 per share, reflecting a year-over-year decrease of 2.84%. Additionally, revenue is projected to be $6.65 billion, marking a 2.4% increase from the same quarter last year.
For the entire year, the Zacks Consensus Estimates forecast earnings of $12.13 per share and revenue of $26.56 billion, representing increases of 1.59% and 4.17%, respectively, from the previous year.
Investors should also keep an eye on recent changes in analyst estimates for McDonald’s. Such revisions often indicate evolving business trends. Positive revisions generally reflect analysts’ confidence in the company’s performance and its profit potential.
Research indicates that changes in estimates are closely linked to short-term stock price movements. The Zacks Rank, a model that incorporates these estimate changes, provides a useful rating system. The Zacks Rank ranges from #1 (Strong Buy) to #5 (Strong Sell). Historically, stocks with a Zacks Rank of #1 have achieved an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate for McDonald’s has decreased by 0.51%. Currently, McDonald’s holds a Zacks Rank of #3 (Hold).
In terms of valuation, McDonald’s has a Forward P/E ratio of 20.95, which is higher than its industry’s Forward P/E of 19.51.
McDonald’s PEG ratio stands at 2.92. This ratio, similar to the P/E ratio, also considers the company’s expected earnings growth rate. As of the end of the last trading session, the Retail – Restaurants industry had an average PEG ratio of 1.87.
The Retail – Restaurants industry is part of the broader Retail-Wholesale sector. Currently, this industry has a Zacks Industry Rank of 160, placing it in the bottom 37% of over 250 industries.
The Zacks Industry Rank evaluates the strength of specific industry groups by calculating the average Zacks Rank of individual stocks within those groups. Research shows that the top 50% rated industries outperform the bottom 50% by a factor of 2 to 1.