McDonald’s (New York Stock Exchange: MCD) plans to disclose earnings in a report on Jan. 31, which could cause ripples across the U.S. restaurant sector.
The restaurant giant is projected to post quarterly revenue of $5.75 billion and EPS of $2.46.Key The metric is U.S. same-store sales, and the forecast for the quarter is as high as +9%. McDonald’s (MCD) has beaten sales forecasts in 5 of its last 7 reports and EPS forecasts in 6 of its last 7 reports.
On Wall Street, UBS heads to McDonald’s (MCD) earnings report, believing earnings guidance will be strong. The company says MCD stocks remain well positioned given their increasingly challenging defensive macro attributes. The chain’s strong global sales momentum is expected to continue to be driven by key competitive advantages. Citi expects a generally positive update from the MCD on strong US trends and easing foreign exchange headwinds.
Wells Fargo was more cautious about its restaurant inventory being equally weighted. Analyst Zachary Fadem and his team believe the discipline of valuations and the risks around exposure to European markets justify an on-the-side view of equities. Bank of America, on the other hand, expects a fairly modest revision to consensus forecasts going forward, noting that relative valuations are at historic peaks with little room for multiple expansions.
Overall, McDonald’s (MCD) has 27 buy equivalent valuations, 10 hold equivalent valuations and 1 sell equivalent valuations by analysts.
Key topics on the conference call will be views on menu pricing, updates on menu innovations, and the impact of loyalty programs. The latest developments in traffic trends at staffing levels in Europe and the US may also be key.
In Seeking Alpha, author Geoff Considine makes a bullish argument on MCD, author Value Prof claims a hold valuation, and author DT Analysis is bearish on fast food stocks. Read all the latest articles about McDonald’s.
Sector Watch: Wingstop (WING), Denny’s (DENN) and Domino’s Pizza (DPZ) are generally the restaurant stocks with the strongest trading ties to McDonald’s. See the brands of restaurants with the highest Seeking Alpha Quant Ratings.