McDonald’s Corp. (NYSE: MCD)
McDonald’s Corp. Earnings
Before the market opened today, McDonald’s Corp. (MCD) announced earnings that beat analyst expectations and pushed shares to all time highs. The fast food chain announced earnings of $1.31 per share on $6.34 billion in revenue while analysts were looking for $1.23 on $6.24 billion in revenue. MCD also beat on same store sales coming in at 5% growth for the quarter compared to estimates at 3.2%. Much of this success was attributed to the addition of all day breakfast items as the CEO explains in his comments below. MCD is setting itself up for another strong year and should be a stock to keep on your radar.
CEO Comments
“All Day Breakfast built on this momentum in the fourth quarter, exceeding internal expectations during the launch phase. It’s driving incremental business. Many customers who otherwise would have gone elsewhere are coming to McDonald’s to enjoy some of their favorite breakfast items, like our Egg McMuffin and hashbrowns at lunch and throughout the rest of the day. At the same time, existing customers are adding breakfast entrees to their regular orders, boosting sales and average check. In addition to benefiting top- and bottom-line growth, All Day Breakfast positions us to regain market share we’ve given up in recent years. In fact, since the launch of All Day Breakfast, we’ve experienced positive weekly comparable sales gaps relative to our QSR sandwich competitors, and we ended the quarter with a positive gap of 2.9%.” (TheStreet)
MCD Technicals
As you can see from the 5-minute chart above, shares skyrocketed to highs of $123.72 in the premarket session before coming back down to earth. Shares opened the day at $121.85, a 3% increase from Fridays close, only to sell off immediately before stabilizing the day around the $120 level. This is usually a typical scenario when a stock reaches all time highs on a gap up it gets sold off from profit takers and short sellers anticipating the profit taking. We saw some good support come in at the $120 level and should see some more at the $118.50 level as well, while resistance will be met at the $122 and $123.72 levels.
Looking back on the daily chart you can see that shares of MCD have been performing well with a strong finish to 2015. Shares are trading well above the 200-day moving average that is currently sitting at $103.31 and you can see that shares broke free back in October from the longer-term consolidation pattern it was in between the $94 and $100 levels. Now shares are trending north bound fueled by the latest earnings release. Currently analysts have an average price target of $122.
Company Profile
McDonald’s Corp. engages in the provision of food service retail. Its activities include franchise and operation of McDonald’s restaurants globally. The restaurants offer a range of food menu including hamburgers and cheeseburgers, fillet, french fries, salads, sundaes, pies as well as drinks and others. It operates through the following geographical segments: United States, Europe, Asia Pacific, Middle East and Africa and Other Countries and Corporate including Canada, Latin America and Corporate. The company was founded by Ray Kroc on April 15, 1955 and is headquartered in Oak Brook, IL. (MarketWatch)
