McDonald's (MCD) Declines More Than Market: Some Information for Investors

McDonald's (MCD) closed the latest trading day at $289.60, indicating a -1.37% change from the previous session's end. The stock trailed the S&P 500, which registered a daily loss of 1.07%. On the other hand, the Dow registered a loss of 0.97%, and the technology-centric Nasdaq decreased by 1.19%.

Shares of the world's biggest hamburger chain witnessed a loss of 0.81% over the previous month, trailing the performance of the Retail-Wholesale sector with its gain of 0.46% and the S&P 500's loss of 0.36%.

Analysts and investors alike will be keeping a close eye on the performance of McDonald's in its upcoming earnings disclosure. The company's earnings per share (EPS) are projected to be $2.86, reflecting a 3.05% decrease from the same quarter last year. Our most recent consensus estimate is calling for quarterly revenue of $6.52 billion, up 1.84% from the year-ago period.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $11.75 per share and revenue of $26.04 billion, indicating changes of -1.59% and +2.16%, respectively, compared to the previous year.

Investors should also pay attention to any latest changes in analyst estimates for McDonald's. Such recent modifications usually signify the changing landscape of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.13% lower. McDonald's presently features a Zacks Rank of #3 (Hold).

Investors should also note McDonald's's current valuation metrics, including its Forward P/E ratio of 24.99. This valuation marks no noticeable deviation compared to its industry's average Forward P/E of 24.99.

Also, we should mention that MCD has a PEG ratio of 3.91. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Retail - Restaurants industry had an average PEG ratio of 2.31 as trading concluded yesterday.