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TheStreet Open House

Service-Sector Earnings to Watch This Week

Stocks in this article: VZEBAYMCDGCIURIAPOLOMC

MCD Revenue Quarterly Chart MCD Revenue Quarterly data by YCharts

McDonald's (MCD)

Background: McDonald's franchises and operates McDonald's restaurants in the global restaurant industry. Its restaurants offer various food items, soft drinks, coffee and other beverages. The company operates approximately 33,500 local restaurants serving approximately 69 million people in 119 countries each day. The company was founded in 1940 and is headquartered in Oak Brook, Ill. McDonald's trades an average of 5.4 million shares per day and has a market cap of $93 billion.

52-Week Range: $85.92 to $102.22

Book Value: $13.92

Price-to-Book Ratio: 6.6

Investors are expecting McDonald's to report slightly improved third-quarter earnings before the market opens on Friday. The consensus EPS estimate is presently $1.48 a share, an improvement of 3 cents, or 2%, from $1.45 during the corresponding period last year.

Analysts' EPS estimates this quarter range from $1.41 to a high of $1.53. Analysts also expect McDonald's to beat last quarter's EPS, which was $1.32.

The majority of analysts believe McDonald's continues to offer a buying opportunity. Sixteen of the 30 analysts covering the company rate it a buy. Some (12) are taking a more cautious approach, and rate it a hold. As of the last update I have, one analyst recommends selling some or all holdings. McDonald's appreciated 5% over the last year, and the average analyst target price for the stock is $99.34.

McDonald's isn't in a bear or bull trend. I expect to see a lot of the same in the next quarter's earnings estimates as well.

McDonald's does pay a decent dividend with a yield of 3%. Considering the global strength, the yield in itself may be attractive for longer-term buy-and-hold investors.

The last reported short interest is paltry. Shares sold short were only 1.1% of the average trading float. MCD Chart MCD data by YCharts

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