McDonald’s Faces Challenges as Q3 Earnings Report Approaches

Third-Quarter Earnings Preview: Analysts Expect $3.20 per Share

McDonald’s Corp MCD is set to release its third-quarter earnings report on Tuesday. Analysts forecast earnings per share (EPS) of $3.20 along with revenue of $6.82 billion, with the announcement occurring prior to market opening.

The company is currently under the spotlight due to a recent E. coli outbreak tied to its Quarter Pounders, raising concerns among consumers and investors alike.

Despite this outbreak, analysts remain largely optimistic about the potential impact on McDonald’s stock. Nonetheless, alongside these health concerns, rising pricing issues add uncertainty as the company approaches its earnings announcement.

Additional Context: Ice Cream Machines Repairable Again

The stock has risen 14% over the past year, although it remains flat year-to-date.

Next, we’ll analyze McDonald’s stock in relation to expert expectations and current market conditions.

McDonald’s Stock Experiences Downward Trend Ahead of Earnings

Currently, McDonald’s stock is on a downward trend, with shares priced at $297.90 trading below its five-day, 20-day, and 50-day exponential moving averages.

Chart created using Benzinga Pro

This selling pressure points to a potential for further declines in the short term. McDonald’s price is currently below its eight-day ($306.44), 20-day ($305.86), and 50-day ($297.93) simple moving averages, which could indicate continued downside risks.

However, looking long term, some positive signals emerge. McDonald’s is currently above its 200-day SMA of $279.31, suggesting some underlying strength. The MACD indicator sits at 1.32, indicating bullish momentum. Meanwhile, the declining Relative Strength Index (RSI) at 44.43 shows moderate weakness without nearing oversold thresholds. A drop below 30 could provide a buying opportunity if investors move in.

Mixed Sentiment Among Analysts Regarding McDonald’s

Ratings & Consensus Estimates: Analysts have a consensus rating of Buy for McDonald’s, with a price target set at $318.31. However, recent ratings from Guggenheim, Baird, and Wedbush on October 23 suggest an average target of $290, indicating a downside of about 2.59%.

MCD Price Action: As of Monday, McDonald’s stock was trading up 1.46% at $296.87.

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