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McDonald's Earnings: What to Expect

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McDonald’s Corp. (NYSE: MCD) is set to report its first-quarter financial results before the markets open on Tuesday. The consensus estimates are calling for $1.76 in earnings per share (EPS) and $4.93 billion in revenue. In the same period of last year, the fast-food giant said it had EPS of $1.79 on $5.14 billion in revenue.

This restaurant operator has been among the American companies that pay its workers the least. As some evidence of the ongoing pay problem, note that the U.S. Securities and Exchange Commission has released the compensation of McDonald’s CEO Stephen Easterbrook.

Easterbrook was paid $15.9 million in 2018. That is 2,124 times the median employee salary of $7,473. It means that Easterbrook, who has been CEO since 2015, earns in an hour what it takes a median employee to make in a year, according to data from public company intelligence firm MyLogIQ.

In addition, the king of fast food announced earlier this quarter that it is acquiring a seven-year-old Israeli AI startup company called Dynamic Yield for a reported $300 million. This appears to be the company’s largest acquisition in the past two decades.

Overall, McDonald’s has underperformed the broad markets, with up about 11% year to date. In the past 52 weeks, the stock is actually up nearly 27%.

A few analysts weighed in on McDonald’s ahead of the report:

  • Wells Fargo has an Outperform rating with a $218 price target.
  • Tesley Advisory Group has an Outperform rating and a $210 target.
  • Stephens has an Overweight rating with a $200 target price.
  • RBC’s Buy rating comes with a $205 target price.
  • Jefferies has a Buy rating with a $200 price target.

Shares of McDonald’s were last seen trading at $196.46, in a 52-week range of $153.13 to $198.60. The consensus price target is $200.62.


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