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Can 2Q16 Results Drive McDonald’s Valuation Multiple Up?
Valuation multiple Investors should look at valuation multiples when deciding whether to enter or exit a stock. Valuation multiples are driven by perceived growth, risk and uncertainties, and investors’ willingness to pay for a stock. There are various multiples to evaluate a stock. In this article, we’ll use the PE (price-to-earnings) ratio due to its […]
How Will McDonald’s Expand Its EBIT Margins?
Wall Street analysts are expecting McDonald’s (MCD) to post EBIT of $2.1 billion in 3Q16. This represents an EBIT margin of 33.2% compared to 30.7% in 3Q15.
Will McDonald’s 2Q16 Earnings Beat Analysts’ Estimates?
So far in this series, we’ve discussed McDonald’s (MCD) estimated revenue, sources of revenue, and estimated EBIT (earnings before interest and tax) margins.
Which Fast Food Restaurants Do Analysts Favor?
Jack in the Box (JACK) and Restaurant Brands International (QSR) are analysts’ favorites among the companies we’ve reviewed in this series.
Can Investors Expect Momentum from McDonald’s 3Q16 Earnings?
McDonald’s (MCD) is scheduled to announce its 3Q16 results on October 21, 2016. As of October 13, 2016, it was trading at $115.40, a fall of 9.4% from July 25.
Can McDonald’s Beat Analysts’ Earnings Estimates Again in 3Q16?
In the last four quarters, McDonald’s has beaten analysts’ estimates. In 3Q16, analysts are expecting the company to post EPS of $1.48, a year-over-year rise of 6.1%.
Beef Prices: 2015–2016 Outlook for the Restaurant Industry
Although beef prices recently increased slightly, they’ve been on a downtrend trend since the beginning of 2015. They’re expected to remain elevated for the rest of 2015.
What Will Drive Dunkin’ Brands’ 2Q17 Earnings?
In 2Q17, analysts expect Dunkin’ Brands (DNKN) to post EPS (earnings per share) of $0.62, which represents a rise of 8.8% from its EPS of $0.57 in 2Q16.
Why Analysts Are Expecting Shake Shack to Rise over the Next 4 Quarters
For the next four quarters, analysts are expecting Shake Shack (SHAK) to post revenues of $427.9 million, which would be a 27.4% YoY (year-over-year) rise.
Why Are Pork Prices Stabilizing?
Pork prices have dropped significantly in 2015 from the high of $1.38 per pound in June 2014 to the low of $0.65 per pound in March 2015.
Why Did Wendy’s EBIT Margins Expand in 2Q16?
In 2Q16, Wendy’s posted EBIT of $71.7 million—an EBIT margin of 18.7% compared to 13.3% in 2Q15. Analysts expected the EBIT margin to be 16.7%.
Must-know: Chipotle Mexican Grill’s food costs
CMG reported $372 million in food costs in 3Q14. Food costs accounted for 34.3% of the revenue. It was an increase of 70 basis points year-over-year (or YoY).
Analyzing Burger King’s shifting business model focus in 2Q14
Franchise revenues include royalties and franchise fees. Royalties are calculated as a percentage of franchise restaurant revenues, which are driven by same-store sales.
McDonald’s Risks, Strengths, and Weaknesses
The restaurant industry is susceptible to a wide array of risks of macro and micro factors. As a huge global brand, McDonald’s faces several risks.
Starbucks Year-To-Date Returns Soar to 7.5%
The Starbucks year-to-date return was 7.5% compared to an average return of 4.9% among its rivals.
Must-know: Investors’ reactions to Wendy’s earnings
Share volume was ~14.4 million shares, compared to the 50-day average daily volume of ~4.7 million, according to NASDAQ. Wendy’s closed 2.2%, up at $8.16. Wall Street analyst consensus estimated an adjusted earnings per share (or EPS) of $0.09.
How Food Inflation Impacts The Restaurant Industry
Food inflation can squeeze a restaurant’s operating margins, but a restaurant can adjust the menu pricing and pass the cost on to customers.
McDonald’s Global Presence and the Three-Legged Stool
McDonald’s, the world’s largest fast food chain, has over 38,000 restaurants across 120 countries. In 2018, it had approximately $21.0 billion in sales.
Can Starbucks Deliver Double-Digit EPS Growth in Q1?
Starbucks will report its first-quarter earnings after the market closes on Tuesday. Analysts expect the company to report double-digit EPS growth.
The Word on the Street: What Analysts Are Recommending for Fast-Food and Pizza Companies after 1Q16
JACK, PZZA, and QSR are the most favored stocks in our group of eight fast-food restaurants, with no analyst recommending a “sell” for their stocks.
Declining Fuel Prices Will Continue To Help Restaurant Stocks
There is no way to know how long we could be seeing these lower fuel prices, but restaurants should certainly benefit from the decline.
Why Office Depot And OfficeMax Were A Merger Of Equals
Starboard’s interest in the office supplies industry is well known. Starboard disclosed a ~14.8% stake in Office Depot (ODP) in 2012. It has been pushing ODP to reduce its store size and cut costs.
Must-Know: McDonald’s Has Got Tough Competition
McDonald’s (MCD) competition includes large international and national food chains as well as regional and local retailers of food products.
How McDonald’s Wages and Major Costs Stack Up
McDonald’s performance is sensitive to any changes in price levels—be it food, labor, or rent. So how much does it cost for McDonald’s to generate revenue?
What Do Analysts Recommend for Wendy’s?
With the expectation of a decline in Wendy’s same-store sales growth, investors are skeptical about the company’s future earnings.
Why Did SunTrust Raise Its Target Price for Shake Shack?
On January 3, 2018, SunTrust Robinson Humphrey raised its 12-month target price for Shake Shack (SHAK) from $50.00 to $60.00 while maintaining its “buy” rating.
Trian Fund lowers its position in Allegion
Allegion provides security solutions for homes and businesses, employing more than 8,000 people and selling products in more than 120 countries across the world. Allegion reported third-quarter 2014 net revenues of $546.7 million, up 3.3% compared to the previous year.
What Drove Jack in the Box’s Earnings in 3Q16?
In the last five quarters, Jack in the Box has beaten analysts’ estimates four times.
Why Analysts Expect Dunkin’ Brands’ Earnings Margin to Expand
For 2Q17, analysts expect Dunkin’ Brands (DNKN) to post EBIT (earnings before interest and tax) of $117.4 million, which represents an EBIT margin of 53.1%.
Did Wendy’s 2Q17 Earnings Impress Investors?
For 2Q17, Wendy’s (WEN) reported adjusted earnings per share of $0.15 on revenues of $320.3 million—50.0% higher YoY—but its revenue fell 16.3%.
Deflation, Sales Leverage Drove Wendy’s 1Q16 Earnings Margin
In 1Q16, Wendy’s Company (WEN) posted EBIT (earnings before interest and tax) of $63.8 million, which represented an EBIT margin of 16.9%.
Must-know: Wendy’s forward-looking guidance
Management expects to reduce ~$8 million in general and administrative costs (or G&A) in the first quarter of 2015. The adjusted earnings before interest, taxes, depreciation, and amortization (or EBITDA) is expected to be further reduced by $5 million in 2015.
Why Analysts Expect Domino’s EBIT Margins to Fall in 2Q16
Domino’s Pizza (DPZ) is expected to post EBIT of $99.5 million. This would represent an EBIT margin of 18.7%—a marginal decline from 18.8% in 2Q15.
Wendy’s earnings per share down 9% in 4Q14
Wendy’s earnings per share were down 9% compared to its EPS of $0.11 in the fourth quarter of 2013.
Speculation that Ackman is urging a McDonald’s REIT spinoff
Even if a McDonald’s REIT spinoff is not in the cards, an activist investor who might push for a restructuring could be the catalyst McDonald’s needs.
Is McDonald’s a ‘Buy’ Ahead of Its Q2 Earnings?
McDonald’s is set to report its second-quarter earnings before the market opens on July 28. Let’s look at analysts’ expectations for the quarter.
Shake Shack Announces Expansion Plans in China, Stock Rises
Shake Shack (NYSE:SHAK) has big plans in China. The company announced that it will open 55 franchised restaurants in Mainland China by 2030.
Is McDonald’s a ‘Buy’ at These Levels?
Optimism about reopening the economy, fiscal stimulus packages, and progress in COVID-19 treatment led to a rise in McDonald’s stock price.
What to Expect from Jack in the Box’s Q2 Earnings
For the second quarter, analysts expect Jack in the Box to report revenue of $211.1 million—a fall of 2.1% from the second quarter of 2019.
Why McDonald’s Is a ‘Buy’ before Its Q1 Earnings
McDonald’s (NYSE:MCD) stock declined to a low of $124.23 on March 18. Since then, the company has made a significant recovery.
Shake Shack to Return $10 Million Support Loan amid Criticism
Shake Shack stock rose during Monday’s trading session. The stock rose after the company announced that it will return the government support loan.
JACK Stock Soars after Company’s Operational Update
On Wednesday, Jack in the Box (NASDAQ:JACK) provided an update for its preliminary performance in the second quarter of fiscal 2020, which ended on April 12.
McDonald’s Reports Q1 Comparable Sales, Withdraws 2020 Guidance
The COVID-19 outbreak had a significant impact on McDonald’s (NYSE:MCD) SSSG. The company’s global SSSG rose 7.2% in the first two months of 2020.
How’s Shake Shack Coping amid COVID-19?
So far this year, Shake Shack has lost 44.8% of its stock value. The company has underperformed its peers and the broader equity markets in 2020.
Should You Consider Buying McDonald’s Right Now?
McDonald’s stock price is showing a sharp pullback. As of Wednesday, McDonald’s was trading at $162.98—a rise of 31.2% from March 18.
Has Shake Shack Stock Bottomed Out?
As of Thursday, Shake Shack (NYSE:SHAK) was trading at $61.67—a fall of 16.2% since it reported its fourth-quarter earnings.
McDonald’s Beats Analysts’ Q4 Estimates
Today, McDonald’s reported its earnings for the fourth quarter of 2019. For the quarter, the company reported revenue of $5.35 billion.
What to Expect from McDonald’s Q4 Earnings
McDonald’s will report its fourth-quarter earnings tomorrow before the market opens. Analysts expect McDonald’s to report revenue of $5.31 billion.
What Does Wendy’s Future Look Like?
Innovation, consumer-facing technological development, and brand building with its franchisees are going to be the three crucial aspects of Wendy’s future.
Lower Fuel Costs Boost Restaurant Industry
The connection may not seem direct but many restaurants are affected by higher fuel costs because they have to pay to transport ingredients.
Lower Fuel Costs Help Restaurants – Good For Supply And Demand
Fuel costs declined significantly over the past eight months. They declined from $3.67 per gallon in June 2014 to $2.20 per gallon as of February 2015.
Why fuel prices affect restaurants
Higher fuel costs put pressure on operating costs, and can squeeze profit margins. The demand side also takes a hit. When gas prices are high, consumers tend to economize on transit by eliminating unnecessary trips.
These Consumer Stocks Rose More than 65% in 2019
Consumer stocks had a truly phenomenal 2019. Let’s take a look at five consumer stocks that delivered more than 65% growth in the year.
Is It Time to Buy Shake Shack Stock?
Shake Shack (SHAK) stock is under pressure. The company’s third-quarter sales miss and lower sales expectations weighed on the stock.
Will McDonald’s Strategic Initiatives Fuel Higher Sales?
McDonald’s has been lagging behind its peers this year. Can faster delivery, new technology, and modernized restaurants help sales?
Is It Time to Go Long on McDonald’s Stock?
McDonald’s (MCD) stock has underperformed the broader markets as well as most of its peers so far this year. MCD stock is up about 9.6% so far this year.
Shares up for McDonald’s stock on rumors of Ackman’s interest
Ackman’s fund owned a stake in McDonald’s from 2005 to 2007. He urged McDonald’s to restructure itself. McDonald’s stock almost doubled during that time.
Why Chipotle Stock Could Continue to Rise
So far this year, Chipotle stock has outperformed the broader markets by a wide margin. The stock has risen nearly 89% YTD.
Trian Fund adds position in Mondelez International
Mondelez is a global snacking powerhouse and a world leader in biscuits, chocolate, gum, candy, coffee, and powdered beverages. It owns billion-dollar brands and reported net revenues of $8.4 billion.
Trian Fund reduces its stake in Ingersoll-Rand
Ingersoll-Rand is a global diversified firm. The company’s reported revenues increased 5% to $3,385 million, beating estimates by 6%. It expects revenues for full-year 2014 to increase by approximately 4%.
McDonald’s Menu Struggles to Shed Its Junk Food Rep
Despite health-related controversies, fast food companies such as McDonald’s maintain that they provide consumers with choice and convenience.
Wendy’s Stock Rose Due to Q3 Beat, Unlike Peers
Wendy’s (WEN) stock was trading more than 4% higher in the pre-market session. Today, the company posted stronger-than-expected third-quarter results.
Wendy’s Stock: Lower Q3 Earnings Could Hurt
Wendy’s (WEN) will announce its third-quarter earnings on Wednesday. We think that Wendy’s stock could take a hit due to lower third-quarter earnings.
Chipotle Stock: Analysts Upbeat before Q3 Earnings
On October 18, Bank of America upgraded Chipotle (CMG) stock from “underperform” to “neutral.” The bank increased its target price to $850 from $590.
Why Is Wendy’s Stock Feeling Pressure?
Cowen analyst Andrew Charles downgraded Wendy’s stock to “market perform” from “outperform.” He lowered the target price to $20 from $22.
The Restaurant Industry: An Overview
More Americans are eating out, and they’re eating out more often. The restaurant industry’s share of the food dollar is 51%, up from 25% in 1955.
Restaurant Stocks Dip, Fight for Morning Traffic Heats Up
Restaurant stocks closed lower on Tuesday as the fight to win the morning traffic intensified. Wendy’s will expand its breakfast menu nationwide in 2020.
Wendy’s Stock: Why Does It Continue to Fall?
A few analysts downgraded Wendy’s stock following the reduced outlook. Guggenheim and BTIG downgraded the stock to “neutral” from “buy.”
McDonald’s Beat Analysts’ Q1 Expectations
McDonald’s (MCD) posted its first-quarter earnings on April 30. The company posted an adjusted EPS of $1.78 on revenues of $4.96 billion.
What Will Drive Wendy’s Revenue in Q1 2019?
Analysts expect Wendy’s (WEN) to post adjusted EPS of $399.5 million in the first quarter of 2019, a rise of 5.0% from its $380.6 million in the first quarter of 2018.
Unit Growth to Drive Shake Shack’s Revenue in the First Quarter
For the first quarter of 2019, analysts expect Shake Shack (SHAK) to post revenue of $126.9 million.
Can Shake Shack Maintain Upward Momentum with Strong Q1 Results?
Shake Shack (SHAK) is scheduled to report its first-quarter earnings after the market closes on May 2.
Analysts Expect McDonald’s Revenue to Fall in Q1 2019
In the first quarter of 2019, analysts expect McDonald’s (MCD) revenue to fall 4.1% YoY (year-over-year) to $4.93 billion from $5.14 billion, likely due to its company-owned restaurant count falling.
Cowen Initiates Coverage on Wendy’s with an ‘Outperform’ Rating
On April 10, Cowen initiated coverage on Wendy’s (WEN) with an “outperform” recommendation and a price target of $21.0.
Why Investors Are Optimistic about Wendy’s Q4 Results
Wendy’s (WEN) is scheduled to post its fourth-quarter earnings results before the market opens on February 21.
What Analysts Expect from McDonald’s Revenue in 2019
In the first three quarters of 2018, McDonald’s (MCD) revenue fell 9.3% to $15.86 billion.
Why McDonald’s Stock Soared 6.6% in November
McDonald’s (MCD) stock rose 6.6% in November on investor optimism surrounding the company’s initiative to modernize its restaurants.
Why Did Kalinowski Upgrade McDonald’s?
On June 7, Kalinowski Equity Research upgraded McDonald’s (MCD) from “neutral” to “buy.” The firm set a price target of $191 for MCD stock.
Will McDonald’s 1Q18 Earnings Boost Its Stock Price?
McDonald’s is scheduled to announce its 1Q18 earnings before the market opens on April 30.
Why Stephens Downgraded McDonald’s
On April 16, 2018, Stephens downgraded McDonald’s (MCD) from “overweight” to “equal weight.”
Why McDonald’s EBIT Margin Expanded in 2018
McDonald’s (MCD) has posted EBIT (earnings before interest and tax) of ~$8.9 billion, which represents an EBIT margin of 38.8%.
McDonald’s Posts Strong Same-Store Sales Growth in 2017
MCD posted SSSG of 3.8%, 1.5%, -1.0%, and 0.2% in 2016, 2015, 2014, and 2013, respectively.
Why McDonald’s Revenues Declined in 2017
In 2017, McDonald’s (MCD) posted revenues of ~$22.8 billion, which represents a fall of 7.3% from ~$24.6 billion in 2016.
How Shake Shack’s Valuation Compares with Peers
As of March 19, 2018, Shake Shack was trading at a forward EV-to-sales multiple of 3.1x compared to 3.6x at the beginning of 2017.
What Analysts Recommend for McDonald’s
Target price As of March 9, 2018, McDonald’s (MCD) was trading at $157.24. On the same day, analysts were expecting the company’s stock price to reach $187.11 in the next 12 months, which represents a return potential of 19.0%. The fear of customers opting for cheaper menu options with the introduction of McDonald’s new $1 $2 […]
Could McDonald’s Earnings Rise in 2018?
Expectations for 2018 Analysts expect McDonald’s (MCD) to post adjusted EPS (earnings per share) of $7.58 in 2018, which represents 13.6% growth from its EPS of $6.67 in 2017. EBIT (earnings before interest and tax) margin expansion, a lower effective tax rate, and share repurchases are expected to drive the company’s EPS in 2018. In 2018, […]
What Analysts Expect for McDonald’s Revenue in 2018
Revenue expectations In 2018, analysts expect McDonald’s (MCD) to post revenue of $21.1 billion, which represents a fall of 7.7% from its revenue of $22.8 billion in 2017. As part of its optimizing strategy, McDonald’s has been refranchising its company-owned restaurants. The refranchising is expected to lower the company’s revenue in 2018. However, some of […]
Has McDonald’s Stock Price Bottomed Out?
In this series, we’ll look at analysts’ revenue and earnings estimates for McDonald’s in the next four quarters.
Analyst Recommendations for Wendy’s after Its 4Q17 Earnings
As of February 23, 2018, Wendy’s (WEN) was trading at $16.88.
How Wendy’s Valuation Multiple Compares to Its Peers
The initiatives taken by Wendy’s management to drive SSSG appear to have led to a rise in WEN stock and a higher valuation multiple.
Why Wendy’s Missed Analysts’ Earnings Estimate in 4Q17
In 4Q17, Wendy’s (WEN) posted EPS of $0.64. After removing one-time or special items, its adjusted EPS was $0.11.
Why Wendy’s Earnings Margin Expanded in 4Q17
In 4Q17, Wendy’s (WEN) posted EBIT of $70.6 million, which represents an EBIT margin of 22.8%.
What Analysts Expect for Wendy’s Revenue in 2018
For 2018, analysts are expecting Wendy’s (WEN) to post revenue of $1.3 billion, which represents a growth of 2.6%.
What Drove Wendy’s Same-Store Sales Growth in 4Q17?
Wendy’s (WEN) posted SSSG (same-store sales growth) of 1.3% in the North American region compared to 0.8% in 4Q16.
Wendy’s Revenue and Analysts’ Estimate for 4Q17
In 4Q17, Wendy’s (WEN) posted revenue of $309.3 million, which represents a fall of 0.2% from $309.9 million in 4Q16.
Why Wendy’s Stock Rose after 4Q17 Earnings Release
Wendy’s (WEN) posted its 4Q17 earnings on February 21, with adjusted EPS of $0.11and revenues of $309.3 million.
How Shake Shack’s Valuation Multiple Compares with Its Peers
On February 16, 2018, Shake Shack was trading at a forward-EV-to-sales multiple of ~2.9x.