Jump to content

​​​McDonald’s share price and Q4 earnings results preview

Recommended Posts

McDonald’s Q4 2024 earnings preview: what to expect amid Middle East boycott.

McDonaldsSource: Bloomberg

 Written by: Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: 

When will McDonald's report its latest earnings?

McDonald’s is set to release its fourth quarter (Q4) 2023 results on 5 February 2024. The results are for the quarter ending December 2023.

Key financial highlights for Q4 2023

Key financial highlights for the upcoming results are as follows:

Revenue of $6.452 billion : +8.86% year-on-year (YoY)

Earnings per Share (EPS) : $2.82: +8.88% (YoY)

Price-to-earnings (P/E) ratio: 25.75

Restaurant margin : 15.48% (versus 5.00% Q4 2022)

Dividend yield: 2.29%

McDonald’s Q4 earnings impacted by Middle East boycott

McDonald's is currently facing challenges from a boycott in the Middle East due to false accusations of supporting Israel. This boycott has had a meaningful impact on the company's business, and analysts will be interested in learning more about the sales impact and how long it is expected to last.

During the earnings call on the 5 February, analysts will also be looking for updates on the sustainability of operating margins in light of last year’s cost inflation. McDonald's has maintained stable margins in recent years through menu price increases and technology initiatives, and investors will want to see evidence that this can continue. Furthermore, there will be interest in an update on McDonald's business in China, which is its third largest market globally. Restoring operations in China to full capacity is crucial for the company's momentum.

McDonald's has strong business fundamentals and a strong brand, which should help it navigate through the difficulties, especially if inflation in the US continues to subside and the country’s economy manages the soft landing analysts currently forecast.

If inflation were to flare up again due to an escalation in the Middle East and the Suez Canal being de facto closed to non-Russian containerships, and perhaps soon oil tankers as well, McDonald's has in the past been successful in passing on price increases without significantly affecting demand and may well do so again. There are limits to its pricing power, though, especially in a potential recession which would negatively affect consumer spending while input and labour costs may increase once more. If market conditions were to worsen, McDonald's could implement discounting strategies to capture market share through value offerings and leveraging its size advantage.

Despite the challenging environment in the Middle East, McDonald's has maintained a strong appetite for its food and beverages. The company is expected to benefit from increased US same-store sales and a larger share of the quick-service market in 2023, driven by the growth of digital orders and value offerings. McDonald's loyalty program, with approximately 25 million active members, has the potential to drive digital sales and increase customer frequency, contributing to the growth of US comparable sales.

The company planned to expand its global franchise in 2023 with 400 openings in the US and 1,500 globally, including 900 in China. These new restaurants were expected to contribute around 1.5% to sales growth in 2023. The upcoming results should shed more light on these expansion plans.

How to trade McDonald’s into the results

McDonald's analystsSource: Refinitiv

Refinitiv data shows a consensus analyst rating of ‘buy’ for McDonald’s – 11 strong buy, 21 buy and 8 hold - with the median of estimates suggesting a long-term price target of $323.20 for the share, roughly 10.68% higher than the current price (as of 29 January 2024).

McDonald’s technical view

The McDonald’s 23% share price gain from its October $245.73 low to last week’s $302.39 all-time record high has given way to some profit taking ahead of its Q4 results.

The fall through the October-to-January uptrend line at $295.36 puts the mid-December to current January lows at $287.20 to $285.72 back on the plate. As long as this support zone holds, the medium-term uptrend remains intact.

McDonald’s Daily Chart

McDonald's daily chartSource: Tradingview

A fall through and daily chart close below the $285.72 mid-December low would most likely lead to the 200-day simple moving average (SMA) at $283.66 being revisited.

Provided that the next lower late-November low at $278.06 isn’t being fallen through, though, the overall technical picture for the McDonald’s share price remains long-term bullish.

A rise above the current January all-time high at $302.39 would bring the minor psychological $350 region to the fore.



This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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

    • Yeah! I think I would have to agree with you on this as I have benefited a lot from the event this recent times & I have plans of leveraging the event for a long time.
    • 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.
  • Create New...