McDonald's ( NYSE: MCD ) will report earnings before the opening bell on Thursday, October 27 with analysts expecting revenue of $5.70B and EPS of $2.58 to be disclosed. The fast-food giant is tipped to show global same-store sales growth of 5.7%, including a mark of 3.8% in the U.S.
The inflationary backdrop and FX concerns has led to 21 downward EPS revisions over the last 90 days in comparison to only 3 EPS bumps higher. Of note, McDonald's ( MCD ) has also missed consensus EPS marks in the last three quarters.
Heading into the report, Guggenheim lowered its price target on McDonald's ( MCD ) to $280.00 from $290.00 to account for the FX wildcard. However, the firm likes the overall position MCD is in. "We think that industry margin and store development headwinds provide MCD with a competitive opportunity to gain share," noted analyst Gregory Francfort. The firm kept a Buy rated on McDonalds' ( MCD ) and has it tagged as a Best Idea for the restaurant sector.
Meanwhile, Citi warned recently that McDonald's ( MCD ) may underperform expectations in Europe due to inflation pressure on consumers.
If there is to be a catalyst with the McDonald's report ( MCD ), it may be on the conference call when management updates on the strong responses to the adult Happy Meal menu initiative, Halloween Happy Meals, and the return of the McRib menu item. Those three menu factors are expected by some to lead to positive commentary on overall Q4 traffic trends for the chain. Also keep an eye on Beyond Meat ( BYND ) and Krispy Kreme ( DNUT ) for potential developments concerning their McDonald's menu tests.
Over the last 52 weeks, McDonald's ( MCD ) has the 6th highest share price return out of the 55 publicly-traded restaurant stocks.
Read the latest breakdowns on McDonald's from Seeking Alpha authors.
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McDonald's earnings preview: Inflation blowback, menu initiatives and FX are in focus