Analysts Have Made A Financial Statement On McDonald's Corporation's (NYSE:MCD) First-Quarter Report

McDonald's Corporation (NYSE:MCD) came out with its quarterly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Revenues of US$6.2b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$2.66, missing estimates by 2.4%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on McDonald's after the latest results.

See our latest analysis for McDonald's

Taking into account the latest results, the most recent consensus for McDonald's from 30 analysts is for revenues of US$26.7b in 2024. If met, it would imply a satisfactory 3.6% increase on its revenue over the past 12 months. Per-share earnings are expected to rise 2.8% to US$12.23. In the lead-up to this report, the analysts had been modelling revenues of US$26.9b and earnings per share (EPS) of US$12.40 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

There were no changes to revenue or earnings estimates or the price target of US$316, suggesting that the company has met expectations in its recent result. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on McDonald's, with the most bullish analyst valuing it at US$357 and the most bearish at US$285 per share. This is a very narrow spread of estimates, implying either that McDonald's is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 4.8% growth on an annualised basis. That is in line with its 4.9% annual growth over the past five years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues grow 9.8% annually. So although McDonald's is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$316, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple McDonald's analysts - going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for McDonald's (1 makes us a bit uncomfortable) you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.