{"id":15369,"date":"2024-10-15T07:22:25","date_gmt":"2024-10-15T07:22:25","guid":{"rendered":"https:\/\/www.vtmarkets.com\/?p=15369"},"modified":"2024-10-15T07:22:25","modified_gmt":"2024-10-15T07:22:25","slug":"mcdonalds-gains-but-lags-retail-sector-growth","status":"publish","type":"post","link":"https:\/\/www.global-vtrader.com\/en\/analysis\/mcdonalds-gains-but-lags-retail-sector-growth\/","title":{"rendered":"McDonald\u2019s Gains but Lags Retail Sector Growth"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\">Key points<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>McDonald\u2019s shares climbed 1.57% in the last session, outperforming the S&amp;P 500 and Dow but lagging behind the retail sector over the past month.<\/li>\n\n\n\n<li>EPS for Q3 is expected to reach $3.15, a 1.25% decline, while annual revenue forecasts suggest a modest 2.15% growth for the year.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-dots\" \/>\n\n\n\n<p class=\"wp-block-paragraph\">McDonald\u2019s saw its stock climb to $309.84, edging up 1.57% on the day, <a href=\"https:\/\/www.vtmarkets.com\/analysis\/sp-500-closes-flat-as-tech-gains-pressured-by-middle-east-tensions\/\"><strong>beating the S&amp;P 500\u2019s<\/strong><\/a> 0.77% gain and the Dow\u2019s 0.47% rise. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Nasdaq, driven largely by tech momentum, increased 0.87%. However, over the past month, McDonald\u2019s has gained just 2.87%, trailing the Retail-Wholesale sector\u2019s 5.56% rise and the S&amp;P 500\u2019s 4.87% increase.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large is-resized\"><img decoding=\"async\" src=\"https:\/\/www.vtmarkets.com\/wp-content\/uploads\/2024\/10\/image-22-1024x462.jpeg\" alt=\"\" class=\"wp-image-15370\" style=\"width:1450px;height:auto\" \/><\/figure>\n\n\n\n<p class=\"has-text-align-center wp-block-paragraph\"><em>Picture: McDonald&#8217;s (MCD) shows a strong upward movement in recent sessions with the stock closing at 309.94 after opening at 302.10 on the <a href=\"https:\/\/vtmarketsapp.onelink.me\/CD7D\/240525WA\">VT Markets app<\/a>.<\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\"><strong>Revenue Growth, Declining Profitability May Affect Sentiment<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Traders will focus on the fast-food leader&#8217;s upcoming earnings release, which is expected to show $6.76 billion in quarterly revenue\u20141.05% higher year-on-year. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, EPS projections are less upbeat at $3.15, reflecting a 1.25% dip. For the full year, McDonald\u2019s revenue is forecast at $26.04 billion, up 2.15%, but its EPS is projected at $11.71, down by 1.93%. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This blend of moderate revenue growth with declining profitability could influence trader sentiment.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">McDonald&#39;s Stock An Outperform, Will This Factor Boost Same Store Sales? <a href=\"https:\/\/t.co\/ZzBoIt31dP\">https:\/\/t.co\/ZzBoIt31dP<\/a><\/p>&mdash; Investors.com (@IBDinvestors) <a href=\"https:\/\/twitter.com\/IBDinvestors\/status\/1825529472583389319?ref_src=twsrc%5Etfw\">August 19, 2024<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">The stock has undergone small positive revisions in analyst forecasts recently, hinting at a cautiously optimistic shift in market expectations. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Our research shows that such adjustments can closely align with near-term stock performance.\u00a0<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\"><strong>McDonald\u2019s Trades at a Premium with Higher P\/E and PEG Ratios<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Valuations remain an area of interest, with McDonald\u2019s trading at a forward P\/E of 26.05, above the industry average of 22.22. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The stock\u2019s PEG ratio stands at 4.06, indicating a premium relative to its expected earnings growth. In comparison, the broader Retail-Restaurant industry carries an average PEG ratio of 2.12.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This industry currently ranks 151st among the more than 250 industries tracked, positioning it in the bottom 41%. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Our research shows that industries in the top half tend to outperform those in the lower half by a 2:1 ratio, which could reflect lingering headwinds in the fast-food segment despite the broader retail sector\u2019s gains.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>See also: <a href=\"https:\/\/www.vtmarkets.com\/market_analysis\/week-ahead-fed-mulls-policy-as-inflation-softens\/\">Fed Mulls Policy as Inflation Softens<\/a><\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Market participants may adjust their expectations based on earnings results, and the valuation premium suggests limited room for error. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If McDonald\u2019s fails to meet expectations, traders could rotate towards better-performing retail stocks with more favourable growth and valuation metrics. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">On the other hand, any earnings surprise could provide momentum to the stock given the modest recent upgrades in analyst estimates.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Start trading now \u2014 click <\/strong><a href=\"https:\/\/www.vtmarkets.com\/trade-now\/?utm_campaign=account_c&amp;utm_source=dma&amp;utm_medium=website\"><strong>here<\/strong><\/a><strong> to create your live VT Markets account.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>McDonald\u2019s (MCD) rose 1.57% but still trails the Retail-Wholesale sector. Traders await its earnings, with forecasts showing mixed signals. &#8211; vtmarkets.com <\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[27],"tags":[33],"class_list":["post-15369","post","type-post","status-publish","format-standard","hentry","category-analysis","tag-stocks"],"acf":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/posts\/15369","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/comments?post=15369"}],"version-history":[{"count":0,"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/posts\/15369\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/media?parent=15369"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/categories?post=15369"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/tags?post=15369"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}