/McDonald)
McDonald's Corporation (MCD), with a market cap of $185.4 billion, is a leading global fast-food chain that operates and franchises quick-service restaurants. The Chicago-based company is expected to announce its fiscal Q2 earnings results before the market opens on Monday, Jul. 29.
Ahead of this event, analysts expect the fast food giant to report a profit of $3.10 per share, a slight decrease of 2.2% from $3.17 per share in the previous year's quarter. The company has surpassed Wall Street's bottom-line estimates in three of the past four quarters while missing on one other occasion. In the most recent quarter, the company reported an EPS of $2.70, reflecting a 2% year-over-year jump but narrowly missing the consensus estimate due to the impact of budget-conscious consumers.
For fiscal 2024, analysts expect MCD to report EPS of $12.17, up 1.9% from $11.94 in fiscal 2023. Looking forward to fiscal 2025, EPS is expected to grow by 8.2% annually to $13.17.
On a YTD basis, MCD saw a decline of 13.2%, lagging behind both the S&P 500 Index's ($SPX) 17.9% rise and the S&P 500 Cons Disc Sector SPDR's (XLY) 8.2% gain over the same period.
Shares of MCD declined marginally on Apr. 30 due to the company missing Q1 profit estimates for the first time in two years, with global comparable sales growth falling short of analyst expectations and international sales being negatively impacted by the Middle East conflict and a sluggish Chinese economy.
However, on May 16, the company launched a limited-time $5 meal deal nationwide starting Jun. 25 to attract budget-conscious customers amid rising prices and declining consumer spending. This reflects its strategy to boost sales amidst industry competition and lower customer traffic.
Analysts' consensus rating on McDonald's stock is cautiously optimistic, with a "Moderate Buy" rating overall. Out of 31 analysts covering the stock, opinions include 17 "Strong Buys," two "Moderate Buys," and 12 "Holds." This configuration has remained relatively steady over the past three months. The average analyst price target for MCD is $311.83, suggesting a modest potential upside of 21.2% from current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
