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Market Update

Earnings on Tap: McDonald's

Investors will be hoping for a surprise from McDonald's after Yum Brands reported unexpectedly strong results last week.

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The world's largest fast-food restaurant chain,  McDonald's (MCD), is due to report third-quarter results before the opening bell on Friday. Wall Street analysts the Oak Brook, Ill., company to report earnings of $1.47 per share compared with $1.45 a year ago.

Although earnings will partly be boosted by the company's share-repurchase program, McDonald's is facing slower growth globally as well as currency headwinds. The company recently issued an outlook statement predicting same-store sales would be slower than in the second quarter. Forecasts were downgraded following the worst July same-store-sales figure in nine years. However, Morningstar analyst R.J. Hottovy says the company remains resilient despite the increasingly challenging environment for restaurant operators.

After a decline of more than 6% year to date in its share price, McDonald's trades around Hottovy's fair value estimate.

Rouhan Sharma does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.