McDonald's (MCD) Stock Sinks As Market Gains: What You Should Know

McDonald's (MCD) closed the most recent trading day at $194.72, moving -0.12% from the previous trading session. This move lagged the S&P 500's daily gain of 0.29%. Meanwhile, the Dow gained 0.11%, and the Nasdaq, a tech-heavy index, added 0.44%.

Heading into today, shares of the world's biggest hamburger chain had gained 0.86% over the past month, outpacing the Retail-Wholesale sector's gain of 0.53% and lagging the S&P 500's gain of 1.51% in that time.

Investors will be hoping for strength from MCD as it approaches its next earnings release. The company is expected to report EPS of $1.96, down 0.51% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $5.30 billion, up 2.64% from the prior-year quarter.

MCD's full-year Zacks Consensus Estimates are calling for earnings of $7.84 per share and revenue of $21.03 billion. These results would represent year-over-year changes of -0.76% and +0.04%, respectively.

Any recent changes to analyst estimates for MCD should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.13% lower. MCD currently has a Zacks Rank of #4 (Sell).

Digging into valuation, MCD currently has a Forward P/E ratio of 24.88. For comparison, its industry has an average Forward P/E of 23.26, which means MCD is trading at a premium to the group.

Meanwhile, MCD's PEG ratio is currently 2.95. 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 was holding an average PEG ratio of 2.23 at yesterday's closing price.

The Retail - Restaurants industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 51, which puts it in the top 20% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow MCD in the coming trading sessions, be sure to utilize Zacks.com.

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