McDonald‘s (MCD) earnings: positive long-term outlook

4:30 am ET, 23 Oct 2018

McDonald's Corporation (MCD) shares are trading at $165.80. The company is announcing its quarterly earnings results on Tuesday before the market opens. What's driving McDonald's stock price? What's MCD stock price forecast?

McDonald’s Corporation operates and franchises restaurants. The Company announced a corporate restructuring earlier this year which is aimed at “eliminating layers”. It is also focusing on the “Velocity Growth Plan” announced in March 2017.

A lot of investors feel that the stock is a safe long-term bet because of the Company’s strong fundamentals. On the other hand, some investors worry about the rising competition from specialty food chains. Last quarter’s revenue fell 11% to $5.35 billion and earnings per share came at $1.99 compared to $1.73 for the same period last year.  

Third-quarter results will be released before market open on October 23, 2018.  Analysts expect the company to earn $2.00 per share on revenue of $5.32 billion. The Company beat analyst estimates in the previous four quarters.

What is the sentiment towards the MCD stock? Our technical analysis shows that:

  • The stock short-term sentiment (next 30 days) is trending negative;
  • The mid-term sentiment (3-6 months) is trending positive;
  • The long-term sentiment (9-12 months) is trending positive. 

Over the last month, McDonald's Corporation (MCD) returned -0.56%.

McDonald's Corporation (MCD) average analyst price target ($182.81) is 11.59% above its current price ($163.82).

For the latest price and information on McDonald's Corporation, please visit Finstead and search for "MCD price" or "MCD news".

McDonald's Corporation (MCD) Stock Guide

Updated at: 5:08 am ET, 18 Sep 2020

Before we start: if you're looking for MCD stock price, you can quickly find it out by visiting Finny and typing "MCD quote". If you're looking for a quick scoop on MCD stock (chart, price target, market cap, news and buy or sell analysis), go to Finny and look for "MCD". You'll get all this info in one place. Or you can just type "MCD news" to get the latest stock news.

Looking to buy or sell McDonald's Corporation (MCD)? Interested in getting the full scoop on MCD, including earnings and dividends, stock forecast, buy or sell analysis and key stats? If so, you came to the right place.

In this MCD stock guide, we'll address key questions about MCD, above and beyond what you can find on Yahoo Finance, Zacks, MarketWatch or Morningstar.

Here is what you'll be able to find in this guide:

Earnings and Dividends: earnings, earnings date, dividend rate and dividend yield;
Analyst Predictions: stock forecast and analyst ratings;
Analysis: Finny Score and buy or sell analysis;
Key Stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio, industry, sector, and number of employees.

And here is the list of questions we'll answer:
1. What are MCD earnings?
2. What is MCD dividend?
3. What is MCD dividend yield?
4. What is MCD stock forecast (i.e., prediction)?
5. MCD buy or sell? What is MCD Finny Score?
6. What are the reasons to buy MCD? Why should I buy MCD stock?
7. What are the reasons to sell MCD? Why should I sell MCD stock?
8. What are MCD key stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

So let's start. Scroll down to the question that interests you the most.

Earnings and Dividends

1. What are MCD earnings?

MCD trailing 12-month earnings per share (EPS) is $6.33.

2. What is MCD dividend?

MCD forward dividend is $5.00.

3. What is MCD dividend yield?

MCD forward dividend yield is 2.34%.

Analyst Predictions

4. What is MCD stock forecast (i.e., prediction)?

Based on MCD analyst price targets, MCD stock forecast is $217.23 (for a year from now). That means the average analyst price target for MCD stock is $217.23. The prediction is based on 33 analyst estimates.

The low price target for MCD is $185.00, while the high price target is $245.00.

MCD analyst rating is Buy.

Analysis

5. MCD buy or sell? What is MCD Finny Score?

#{finnyScore:30}Our quantitative analysis shows 3 reasons to buy and 7 reasons to sell MCD, resulting in Finny Score of 30.

6. What are the reasons to buy MCD? Why should I buy MCD stock?

Here are the reasons to buy MCD stock:

  • We believe CEO Easterbrook has set in motion several intriguing strategic moves, including refranchising 4,000 locations by the end of 2017 and more than $500 million in net annual SG&A reductions.
  • Despite turnaround efforts, McDonald's average unit volume ($2.3 million) and cash-on-cash returns (around 25%) for new restaurants still exceed most QSR chains.
  • With a dividend yielding approximately 3% and a new three-year $22 billion-$24 billion capital-return program put in place in 2017, we view McDonald's as attractive for income investors looking for global middle-class exposure.
  • MCD profitability is improving. The YoY profit margin change was 3.72 percentage points. See MCD profitability chart.
  • MCD forward dividend yield is 2.34%, higher than the industry (0.54%) and sector (0.55%) forward dividend yields. See MCD forward dividend chart.
  • MCD average analyst rating is Buy. See MCD analyst rating chart.

7. What are the reasons to sell MCD? Why should I sell MCD stock?

Let's look at the reasons to sell MCD stock (i.e., the bear case):

  • The global QSR industry is fiercely competitive, with a well-documented history of price wars. The maturation of the fast-casual category may make it tougher for the McDonald's brand to stand out among affluent and millennial audiences.
  • Food commodity price volatility, wage inflation, foreign currency swings, and the risk of foodborne illnesses could affect McDonald's quarter-to-quarter results.
  • Bankruptcies among quick-service restaurant franchisees rise during cyclical downturns. The possibility of rising interest rates could constrain franchisee growth or maintenance efforts.
  • MCD stock price ($222.58) is close to the 52-week high ($225.11). Perhaps now is a good time to sell? See MCD price chart.
  • MCD quarterly revenue growth was -30.50%, lower than the industry and sector average revenue growth (1.25% and 0.78%, respectively). See MCD revenue growth chart.
  • MCD Price/Sales ratio is 8.28, which is high compared to its industry peers’ P/S ratios. See MCD forward Price/Sales ratio chart.
  • MCD PEG ratio (P/E adjusted for growth) is 9.53, which is high compared to its industry peers’ PEG ratios. See MCD PEG chart.
  • MCD average analyst price target ($217.23) is below its current price ($222.58). See MCD price target chart.
  • MCD cash to debt ratio is 0.06, lower than the average industry (0.12) and sector (0.13) cash to debt ratio. See MCD cash to debt chart.
  • MCD Enterprise Value/Revenue multiple is 10.86, which is high compared to its industry peers’ Enterprise Value/Revenue multiples. See MCD Enterprise Value/Revenue chart.

Key Stats

8. What are MCD key stats : revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

Let's look at the key statistics for MCD:

Metrics MCD
Price $214.90
Average Price Target / Upside $217.23 / 1.08%
Average Analyst Rating Buy
Forward Dividend Yield 2.34%
Industry Restaurants
Sector Consumer Cyclical
Number of Employees 210,000
Market Cap $158.26B
Forward P/E Ratio 26.23
Price/Book Ratio 8.28
Revenue (TTM) $19.12B
YoY Quarterly Revenue Growth -30.50%
Profit Margin 24.95%

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