McDonald's 1Q17 Expectations: Who's Loving What

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McDonald's 1Q17 Expectations: Who's Loving What PART 1 OF 6

Why McDonald’s Stock Is Rising ahead of Results

MCD’s recent stock performance

Fast-food restaurant chain McDonald’s (MCD) is scheduled to announce its 1Q17 earnings before the market opens on April 25, 2017. Since the announcement of 4Q16 earnings on January 23, 2017, McDonald’s stock has risen 8.5%.

The company’s better-than-expected 4Q16 earnings and the initiatives taken by its management to enhance customer experience at its restaurants appear to have increased investor confidence, leading to a rise in McDonald’s stock price.

Why McDonald&#8217;s Stock Is Rising ahead of Results

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In 4Q16, McDonald’s posted EPS (earnings per share) of $1.44, as compared to the analysts’ estimate of $1.41. McDonald’s expansion plans in China and Hong Kong and the improving US economy appear to have also contributed to the rise in McDonald’s stock price.

Year-to-date performance

McDonald’s started 2017 on a bright note, and the stock has returned 9% YTD (year-to-date). During the same period, peers Wendy’s (WEN), Jack in the Box (JACK), and Restaurant Brands International (QSR) have returned 1.3%, -11.7%, and 18%, respectively.

Since the beginning of 2017, the Consumer Discretionary Select Sector SPDR ETF (XLY) and the S&P 500 INDEX (SPX) have returned 4.4%, and 7.5%, respectively.

Series overview

With McDonald’s 1Q17 earnings around the corner, we’ll use this series to examine analysts’ estimates for revenues, EBIT margins, and earnings per share. We’ll close the series by looking at McDonald’s valuation multiple, analyst recommendations, and price targets for next 12-months.

Continue to the next part for a look at McDonald’s 1Q17 revenue estimates.


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