McDonald's Corporation (NYSE:MCD) Quarterly Earnings Preview

• McDonald's is expected to report an EPS of $2.84 and revenue of $6.48 billion for the fourth quarter of 2024.
• Despite a projected 4.8% decline in EPS, revenue is anticipated to grow by 1.1% due to digital adoption, new menu items, and unit expansion.
• Financial metrics such as the P/E ratio of 25.59 and a debt-to-equity ratio of -10.32 highlight investor sentiment and financial health.

McDonald's Corporation (NYSE:MCD) is a global leader in the fast-food industry, known for its iconic golden arches and a menu that includes favorites like the Big Mac and McNuggets. The company operates thousands of restaurants worldwide, competing with other fast-food giants like Burger King and Wendy's. McDonald's is set to release its quarterly earnings on February 10, 2025, with analysts estimating an EPS of $2.84 and revenue of $6.48 billion.

The upcoming earnings report for the fourth quarter of 2024 is highly anticipated. Analysts expect McDonald's to report an EPS of $2.81, a 4.8% decline from the previous year. Despite this, revenue is projected to rise by 1.1% to $6.48 billion, driven by digital adoption, new menu items, and unit expansion. These factors have helped bolster the company's revenue, even as earnings face pressure.

Over the past month, the consensus EPS estimate has been revised downward by 1.3%. Such revisions are significant as they often signal potential investor actions and can impact the stock's short-term price performance. Investors will be keen to see if McDonald's can exceed these expectations, as a positive surprise could boost the stock price, while a miss might lead to a decline.

McDonald's financial metrics provide insight into its market valuation. The company has a P/E ratio of 25.59, indicating investor willingness to pay for its earnings. Its price-to-sales ratio is 8.13, reflecting the market's valuation of its revenue. The enterprise value to sales ratio is 10.14, and the enterprise value to operating cash flow ratio is 28.28, offering perspectives on the company's valuation relative to sales and cash flow.

The company's earnings yield is approximately 3.91%, providing a view of the return on investment. However, McDonald's has a debt-to-equity ratio of -10.32, indicating a higher level of debt compared to equity. The current ratio is 0.78, showing its ability to cover short-term liabilities with short-term assets. These financial metrics will be closely watched as the earnings report approaches.