McDonald's (MCD) Stock Sinks As Market Gains: What You Should Know
McDonald's (MCD) closed at $262.12 in the latest trading session, marking a -0.87% move from the prior day.
McDonald's (MCD) closed at $262.12 in the latest trading session, marking a -0.87% move from the prior day. This move lagged the S&P 500's daily gain of 0.92%. At the same time, the Dow added 0.51%, and the tech-heavy Nasdaq gained 0.54%.
Coming into today, shares of the world's biggest hamburger chain had gained 0.5% in the past month. In that same time, the Retail-Wholesale sector lost 4.75%, while the S&P 500 lost 0.85%.
Investors will be hoping for strength from McDonald's as it approaches its next earnings release, which is expected to be January 27, 2022. On that day, McDonald's is projected to report earnings of $2.31 per share, which would represent year-over-year growth of 35.88%. Meanwhile, our latest consensus estimate is calling for revenue of $6.03 billion, up 13.41% from the prior-year quarter.
Investors might also notice recent changes to analyst estimates for McDonald's. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.69% higher within the past month. McDonald's is holding a Zacks Rank of #3 (Hold) right now.
Investors should also note McDonald's's current valuation metrics, including its Forward P/E ratio of 26.03. Its industry sports an average Forward P/E of 21.48, so we one might conclude that McDonald's is trading at a premium comparatively.
We can also see that MCD currently has a PEG ratio of 2.28. 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. The Retail - Restaurants industry currently had an average PEG ratio of 1.92 as of yesterday's close.
The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 228, which puts it in the bottom 11% of all 250+ industries.
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.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
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McDonald's Corporation (MCD): Free Stock Analysis Report
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