Jump to content

McDonald’s Q2 earnings: post-pandemic growth strategy expected to continue


Recommended Posts

McDonald’s are expected to post another set of bumper earnings, with the Q2 results predicted to show further growth despite wider struggles in the industry.

McDonald'sSource: Bloomberg
 

 

 Joshua Mahony | Senior Market Analyst, London | Publication date: Thursday 22 July 2021 

When is McDonald’s earning’s date?

McDonald's reports earnings on Wednesday 28 July.

McDonald’s earnings – what to expect

McDonald’s comes into this latest earnings season with the stock trading around record-highs, with having enjoyed a welcome recovery throughout 16-months since the March 2020 Covid-19 pandemic lows.

Despite the volatility and worries evident throughout the world in the face of ongoing Covid-19 restrictions, the fast food giant has remained on a strong footing thanks to its delivery and drive-through model.

That ability to outperform at a time when their competitors have struggled, does provide hope that the firm will have been able to gain market share and expand in the face of wider struggles.

McDonald’s are expected to report revenues of $5.6 billion, up 48% compared with quarter two (Q2) 2020. Meanwhile, earnings per share (EPS) are expected to rise 320% to $2.11.

With Q2 2020 marking the worst quarter of the pandemic, this report promises to deliver some impressive year-on-year (YoY) figures thanks to the base effects involved.

However, aside from those annual comparables, forecasts also point towards quarter-on-quarter (q/q) growth for sales, revenues, pre-tax profit, and EPS. Importantly, the notion that McDonald’s has taken advantage of their relative strength through the past year can be highlighted by expectations of a record number of franchised and company owned restaurants.

 

McDonald’s earnings – valuation and broker ratings

At 34 times earnings and with a yield of 2.20%, McDonald’s is evidently a mature stock that perhaps doesn’t offer the kind of value other less developed companies do. However, it is a trustworthy and stable name that has a proven track record that estimates signal should continue.

McDonald’s remains popular with brokers, with 29 ‘strong buy’ or ‘buy’ recommendations and nine ‘holds’, with no sell recommendations.

McDonald’s shares – technical analysis

The McDonald’s chart highlights what a solid performer this is, with each post-surge retracement period providing relatively shallow pullbacks to reflect the stability associated with the stock.

The latest period of consolidation has seen the stock trade within $224.70 and $237.86 for much of the past three-months. That range provides us with a key area which needs to be broken to bring a sign that we are going to move into a more directional phase.

Certainly the preference is for a bullish breakout given the uptrend in play. With that in mind, a break below $224.70 would signal a deeper retracement of the rally from $200.90 rather than a wider reversal signal for the stock.

McDonald's chartSource: ProRealTime

A reliable performer looking to go from strength to strength

McDonald’s does remain a consistent performer despite the perceived shift towards healthy food options. While the pandemic hurt many in the sector, this report is expected to highlight how the fast food giant has taken advantage to further solidify its position at the top of the food chain.

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • image.png

  • Posts

    • Join the BYDFi Demo Trade Profit Posting and grab your chance to share in a 10,000 USDT prize pool!  Show off your trading skills, post your profits, and let's see who comes out on top! Don't miss out on this chance to win big! 🎉
    • The #meme hype surrounding #Solana may have slowed down with the emergence of the Ton network, but it seems that the enthusiasm for Solana is not fading away entirely. While new networks like Ton are gaining attention, Solana has previously generated significant interest and wealth for investors. However, there are concerns about scammers exploiting the Solana network with various honeypot and rugpull schemes, leading some traders to explore other chains like Base and Ton. Despite the rise of Ton blockchain, a new Solana meme project associated with Pepe the Frog has started to gain traction. One such project, LandWolf, has already amassed over 5,000 active Telegram members and 5,000 Twitter followers, indicating early interest and community engagement. The project aims to unite Pepe fans with the broader crypto community, offering a unique value proposition. LandWolf's ability to secure listings on top-tier exchanges like Bitget showcases the developer's influence and the project's potential. Some enthusiasts have already dubbed $WOLF as the biggest meme coin on Solana, highlighting the ongoing interest and excitement within the Solana ecosystem.
    • Meme coins are cryptocurrencies inspired by internet jokes, like Dogecoin. They're inherently risky due to their extreme price swings. While some meme coins remain purely for fun, others are trying to develop actual uses in gaming or finance. These high-risk, high-reward investments often attract "degenerates" (or "degens") who chase quick profits by jumping into unproven projects without much research.   The potential for massive returns with meme coins can't be ignored, however. Dogecoin's 9800% surge in 2021 exemplifies this. A $100 investment could have turned into a life-changing $9800. This experience highlights the potential regret of focusing solely on "safe" investments with lower potential returns.   Taking inspiration from this, some experienced investors are now allocating a small portion of their portfolio to latest meme coins.one of the latest is Miggles listed on Bitget. This strategy allows them to potentially benefit from future bull runs while limiting their overall risk.
×
×
  • Create New...
us