McDonald's Earnings: What to Expect and How to Prepare

Alright, fellow investors, it's that time again! McDonald's is about to drop its fourth-quarter earnings, and we're all ears. So, let's dive in and see what we can expect from the Golden Arches this time around.



First things first, let's talk about the elephant in the room – the E. coli outbreak. It's no secret that this has been a thorn in McDonald's side, with the company taking a hit to its sales and reputation. But, as they say, every cloud has a silver lining. McDonald's has been quick to address the issue, suspending its relationship with the supplier and pulling Quarter Pounder burgers from affected restaurants. They've also been reassuring customers that their menu items are safe to eat. So, while the outbreak has been a setback, it's not the end of the world for McDonald's.

Now, let's get down to business. Analysts are expecting a slight rise in McDonald's revenue, with a close to 1% year-over-year increase to $6.46 billion. However, adjusted net income is expected to take a 3.6% dip to $2.06 billion, or $2.87 per share. This is a bit of a mixed bag, but it's important to remember that McDonald's has been facing some headwinds, like high commodity prices and a challenging economic environment.



But wait, there's more! Analysts are also expecting same-store sales to post a slight decline from a year ago, before returning to growth this year. This is a bit of a bummer, but it's important to keep in mind that McDonald's has been focusing on value promotions to attract price-conscious consumers. They've rolled out a $5 value meal and extended it through the end of the year, and into 2025. Plus, they've added other value-centric promotions to keep customers coming back.

So, what does all this mean for McDonald's stock? Well, analysts are mostly bullish on the fast-food giant, with nine of the 14 analysts covering the stock tracked by Visible Alpha having a "buy" or equivalent rating, and five "hold" ratings. The consensus price target of about $323 would suggest 10% upside from Friday's close. But, as always, it's important to remember that past performance is not indicative of future results, and there are no guarantees in the stock market.



Now, you might be wondering, "What can I do to prepare for McDonald's earnings report?" Well, first and foremost, don't panic. McDonald's is a well-established company with a long history of steady growth and stability. They've weathered storms before, and they'll weather this one too. But, that doesn't mean you should be complacent. Make sure you do your research, stay informed, and keep an eye on the company's progress.

And remember, folks, the stock market is a marathon, not a sprint. Don't get too caught up in the day-to-day fluctuations. Instead, focus on the long-term trends and the fundamentals of the company. If you believe in McDonald's and its ability to bounce back from this setback, then hold onto your shares and ride out the storm.

So, there you have it – a sneak peek into what we can expect from McDonald's earnings report. Stay tuned for more updates, and happy investing!