McDonald’s earnings: Sales expected to be boosted by menu, franchisee changes
McDonald’s Corp. is expected to report second-quarter earnings on Tuesday before the market opens. RBC Capital Markets analysts believe the fast-food giant is benefiting from changes in restaurant franchisees as well as changes to the menu. Analysts say a year-old grading system is encouraging underperforming franchisees to sell.
“We believe that over 1,000 U.S. restaurants are changing hands (lately or in the near future), and we believe many acquired stores are experiencing double-digit same-store sales growth,” analysts led by David Palmer wrote in a note. RBC estimates second-quarter same-store sales growth was 4%. The FactSet consensus is for a 3.7% same-store sales gain in the quarter.
Why Earnings Season Could Be Great for McDonald’s (MCD)
Investors are always looking for stocks that are poised to beat at earnings season and McDonald’s Corporation (MCD) may be one such company. The firm has earnings coming up pretty soon, and events are shaping up quite nicely for their report.
That is because McDonald’s is seeing favorable earnings estimate revision activity as of late, which is generally a precursor to an earnings beat. After all, analysts raising estimates right before earnings—with the most up-to-date information possible—is a pretty good indicator of some favorable trends underneath the surface for MCD in this report.
McDonald’s Corp Earnings: What to Watch
Investors are optimistic about McDonald’s (NYSE:MCD) earnings report, set to publish before the market opens on Tuesday, July 25. The stock has risen more than 20% so far this year to make the fast food titan one of the best-performing members of the Dow. Let’s look at the key trends that could keep that rally going for shareholders [..] In early March, Mickey D’s detailed a rebound plan that aims to stop the market share losses that have kept a lid on sales growth over the past few years.
The strategy leans on menu improvements like an expanded all-day breakfast offering. It also includes raising food quality through sourcing shifts like a move to cage-free eggs and antibiotic-free chicken. The hope is that, by getting in front of consumers’ changing food demands McDonald’s won’t be playing catch-up against quick-service rivals any more. “I believe the moves we are making will reassert McDonald’s as the global leader” in the industry, CEO Steve Easterbrook told investors.
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On the Tape Today | 7-25-17
LRCX-Lam Research trading into a clean momentum pause near resistance. Game planning a new leg of bullish order flow with a $165 buy stop. Initial target is $177 with a stop loss on a close below the $163 level. Be disciplined on the entry because the stock price is at a level where sellers came in and hit the stock hard in June. Getting my price or not getting in...
SPY ETF spits out another “melted candlestick.” (Indecision)
The good news for bullish traders is that price action is pausing above the $245 breakout level. This means institutions are continuing to support the bid. (Not allowing supply to move the stock lower)
The SPY has now closed above the open price eleven out of the last twelve trading days, yesterday barely, but it was positive. TSLA produced a clean “inside-inside” day breakout…this chart is EXACTLY why we list inside days in the “stocks to trade” section, powerful moves spring out of consolidations. The inside day setup is perhaps the simplest strategy you can implement.
GOOGL is getting hit pre-market after earnings yesterday, but the general market remains well-bid, which means a bullish bias is in play–again.
Today will be a terrific day to use the open range trade in GOOGL. Monitor the last price compared to the open price, and the last price to the opening range (either the first 15 minute candlestick or 30 minute-depends on how early you want to trade).
Because of the large gap in GOOGL you should have very clear price action around these levels. Keep in mind this is a short-term trade based only on the relationship of the last price to the reference points I just gave. This means there is LESS price history and order flow to support your idea…but it is a solid momentum trade because you should get clean volatility off the earnings catalyst.
Your bias for the day is the last price compared to the two reference points (open price and open range)
Stock Market Sector Performance
Stocks to Trade | 7-25-17 Tuesday Edition
Bullish Momentum: AAOI, SHOP, MOMO, WB, CC, BIDU, VRTX, RH, YNDX, SRPT
Bearish Momentum: slca, tjx, rost
Bullish Order Flow: AAOI, WB, BIDU, RH, AMZN, ADSK, FB, AMGN, LRCX, BABA, CELG, BA, ADBE, AVGO, AET, WDC, NFLX, UNH, NVDA
Bearish Order Flow: slca, dks, fl, tjx, rost, tsco, lb, cost, hog
Double Normal Volume: BTI, HAL, SLCA, SRPT, CCI, DKS
Inside Day: ge, c, gm, ebay, v, ko, nflx, sbux, symc, pg, cl, jnpr, cof, clr, skx, ntap, ma, cvs, hog, unh, dfs, dg, esrx, adbe, trip, jwn
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