McDonald’s (NYSE:MCD) is scheduled to report its fourth-quarter earnings on January 31. Its value proposition and well-diversified store base (across 100 countries) indicate that the fast food chain operator could deliver strong sales in Q4 regardless of the economic uncertainty. While cost headwinds could continue to pressure margins, EPS could mark an improvement on the back of leverage from higher sales.
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Notably, in the previous quarter, McDonald’s delivered global comparable sales growth of 10%. Meanwhile, its U.S. comparable sales increased by 6%, marking the ninth consecutive quarter wherein sales improved.
McDonald’s has surpassed Street’s projection in the first three quarters of 2022. As for Q4, analysts expect McDonald’s to post earnings of $2.46 per share, up about 10% year-over-year.
Robert W. Baird analyst David Tarantino expects MCD’s global comparable sales and EPS to meet or exceed estimates. Tarantino expects MCD to post global comparable sales growth of 8.7%. Moreover, the analyst expects McDonald’s to report earnings of $2.44 per share in Q4.
Tarantino is bullish about MCD stock ahead of earnings and expects the company to deliver healthy operating results despite the challenging macroeconomic backdrop. He added, “McDonald’s brand has performed very well amid recessionary pressures in the past.”
MCD’s strong performance amid a difficult macro background is supported by its everyday value proposition.
Is MCD Stock a Buy, Sell, or Hold?
McDonald’s stock is a Moderate Buy on TipRanks ahead of Q4 earnings. It has received nine Buy and four Hold recommendations. Meanwhile, analysts’ price target of $293.38 implies 7.68% upside potential.
