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Here's How Much McDonald's Stock Is Expected to Move After Earnings Wednesday
Key Takeaways
McDonald’s is set to release its fourth-quarter earnings on Wednesday morning, with traders anticipating the fast food giant’s stock could reach new highs following the results.
Current options pricing suggests traders expect McDonald’s (MCD) stock could move up to 3% in either direction by the end of the week. A move of that size from Monday’s close near $326 would lift the stock close to $336, exceeding Friday’s record. At the low end, the stock could slip to $315.
McDonald’s has climbed recently amid a broader rotation out of tech stocks and into more consumer-focused stocks amid some caution about the AI trade. The fast food leader’s stock has added about 6% since the start of the year.
Why This Matters to Investors
As one of America’s biggest fast food chains, analysts and investors will likely look to results from McDonald’s for signals about the health of consumer spending. When the company last reported in October, McDonald’s said traffic has dropped among its lower- and middle-income customers, pointing to signs of financial strain.
UBS analysts wrote ahead of the report that they expect solid sales growth in the U.S. and internationally in the fourth quarter, along with updates about strong first-quarter sales as consumers reward the chain’s focus on value and efforts with win customers over with deals.
McDonald’s is expected to report adjusted earnings per share of $3.04 on a 7% year-over-year rise in revenue to $6.83 billion, according to estimates compiled by Visible Alpha. The company’s same restaurant sales are seen rising by 3.7% from the same time last year.
Related Education
How McDonald’s Profits: Real Estate and Franchising Strategy
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Analysts are mostly bullish on McDonald’s stock. Of the 11 analysts with current ratings tracked by Visible Alpha, eight have recommended buying the stock, compared to one “sell” and two neutral ratings. However, their mean target of $343 would imply just 5% upside from Monday’s close after the stock’s recent rally.
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