Benzinga - by Zacks, Benzinga Contributor.
McDonald's (NYSE: MCD) closed the most recent trading day at $275.60, moving -0.42% from the previous trading session. This change was narrower than the S&P 500's 0.46% loss on the day. Elsewhere, the Dow saw a downswing of 0.98%, while the tech-heavy Nasdaq depreciated by 0.64%.
Shares of the world's biggest hamburger chain have depreciated by 1.87% over the course of the past month, outperforming the Retail-Wholesale sector's loss of 3.05% and the S&P 500's loss of 3.04%.
The investment community will be paying close attention to the earnings performance of McDonald's in its upcoming release. The company is slated to reveal its earnings on April 30, 2024. In that report, analysts expect McDonald's to post earnings of $2.70 per share. This would mark year-over-year growth of 2.66%. Our most recent consensus estimate is calling for quarterly revenue of $6.17 billion, up 4.68% from the year-ago period.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $12.34 per share and revenue of $26.92 billion, indicating changes of +3.35% and +5.59%, respectively, compared to the previous year.
Any recent changes to analyst estimates for McDonald's should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.
Our research suggests that these changes in estimates have a direct relationship with upcoming 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, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.29% decrease. As of now, McDonald's holds a Zacks Rank of #3 (Hold).
With respect to valuation, McDonald's is currently being traded at a Forward P/E ratio of 22.43. Its industry sports an average Forward P/E of 21.75, so one might conclude that McDonald's is trading at a premium comparatively.
Meanwhile, MCD's PEG ratio is currently 3.02. 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 had an average PEG ratio of 1.95 as trading concluded yesterday.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. Currently, this industry holds a Zacks Industry Rank of 152, positioning it in the bottom 40% of all 250+ industries.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
To read this article on Zacks.com click here.