Advertisement
New Zealand markets closed
  • NZX 50

    12,105.29
    +94.63 (+0.79%)
     
  • NZD/USD

    0.5970
    -0.0006 (-0.10%)
     
  • NZD/EUR

    0.5536
    +0.0003 (+0.05%)
     
  • ALL ORDS

    8,153.70
    +80.10 (+0.99%)
     
  • ASX 200

    7,896.90
    +77.30 (+0.99%)
     
  • OIL

    83.11
    -0.06 (-0.07%)
     
  • GOLD

    2,254.80
    +16.40 (+0.73%)
     
  • NASDAQ

    18,254.69
    -26.15 (-0.14%)
     
  • FTSE

    7,952.62
    +20.64 (+0.26%)
     
  • Dow Jones

    39,807.37
    +47.29 (+0.12%)
     
  • DAX

    18,492.49
    +15.40 (+0.08%)
     
  • Hang Seng

    16,541.42
    +148.58 (+0.91%)
     
  • NIKKEI 225

    40,369.44
    +201.37 (+0.50%)
     
  • NZD/JPY

    90.3140
    -0.0790 (-0.09%)
     

What Do Analysts Think About The Future Of McDonald’s Corporation’s (NYSE:MCD)?

As McDonald’s Corporation (NYSE:MCD) released its earnings announcement on 30 September 2018, the consensus outlook from analysts appear fairly confident, as a 19% increase in profits is expected in the upcoming year, relative to the past 5-year average growth rate of 0.08%. Presently, with latest-twelve-month earnings at US$5.2b, we should see this growing to US$6.2b by 2019. Below is a brief commentary on the longer term outlook the market has for McDonald’s. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.

View our latest analysis for McDonald’s

What can we expect from McDonald’s in the longer term?

The 29 analysts covering MCD view its longer term outlook with a positive sentiment. Since forecasting becomes more difficult further into the future, broker analysts generally project out to around three years. To reduce the year-on-year volatility of analyst earnings forecast, I’ve inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.

NYSE:MCD Future Profit November 30th 18
NYSE:MCD Future Profit November 30th 18

By 2021, MCD’s earnings should reach US$6.7b, from current levels of US$5.2b, resulting in an annual growth rate of 5.0%. EPS reaches $9.47 in the final year of forecast compared to the current $6.43 EPS today. With a current profit margin of 23%, this movement will result in a margin of 30% by 2021.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For McDonald’s, I’ve put together three fundamental factors you should further examine:

ADVERTISEMENT
  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.

  2. Valuation: What is McDonald’s worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether McDonald’s is currently mispriced by the market.

  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of McDonald’s? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.