McDonald's Gains As Market Dips: What You Should Know

McDonald's (MCD) closed at $211.92 in the latest trading session, marking a +0.12% move from the prior day. This move outpaced the S&P 500's daily loss of 0.21%. Elsewhere, the Dow lost 0.67%, while the tech-heavy Nasdaq added 0.51%.

Prior to today's trading, shares of the world's biggest hamburger chain had lost 2.46% over the past month. This has lagged the Retail-Wholesale sector's gain of 2.29% and the S&P 500's gain of 4% in that time.

MCD will be looking to display strength as it nears its next earnings release. On that day, MCD is projected to report earnings of $1.79 per share, which would represent a year-over-year decline of 9.14%. Meanwhile, our latest consensus estimate is calling for revenue of $5.37 billion, up 0.38% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $6.19 per share and revenue of $19.23 billion. These totals would mark changes of -21.05% and -8.77%, respectively, from last year.

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. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.59% lower. MCD is currently a Zacks Rank #3 (Hold).

Investors should also note MCD's current valuation metrics, including its Forward P/E ratio of 34.19. For comparison, its industry has an average Forward P/E of 33.11, which means MCD is trading at a premium to the group.

Investors should also note that MCD has a PEG ratio of 4.22 right now. 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. MCD's industry had an average PEG ratio of 3.13 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 169, which puts it in the bottom 34% of all 250+ industries.