MCD is way overvalued but is a favorite investor stock.
- Reports Q2 (Jun) earnings of $1.45 per share, excluding non-recurring items, $0.06 better than the Capital IQ Consensus of $1.39; revenues fell 3.6% year/year to $6.26 bln vs the $6.27 bln Capital IQ Consensus.
- Global comparable sales increased 3.1% vs. ests near +3.4%, reflecting positive comparable sales in all segments. In the U.S., second quarter comparable sales increased 1.8%, with continued contributions from All Day Breakfast and McPick 2 despite softening industry growth during the quarter. Operating income for the quarter rose 10%, reflecting higher sales-driven franchised margins and higher gains from restaurant refranchising. McDonald’s U.S. begins the second half of the year focused on adding more breakfast sandwich favorites – Biscuits, McMuffins and McGriddles – to the All Day Breakfast menu this fall.
- Comparable sales for the International Lead segment increased 2.6% for the quarter, led by positive performance in the U.K., Canada and Australia, and slightly positive results in Germany. Operating income for the quarter increased 4% (7% in constant currencies), driven by improved franchised margins.
- In the High Growth segment, second quarter comparable sales increased 1.6%, led by positive comparable sales performance in China and Russia, along with solid performance across various other markets. The segment’s operating income rose 25% (32% in constant currencies) fueled by improved results in China.
- Comparable sales rose 7.7% in the Foundational markets, reflecting very strong performance in Japan and many other markets. For the segment, operating income for the quarter declined due to the impact of strategic charges associated with the Company’s ongoing refranchising and G&A initiatives.
Yesterday morning they reported and in spite of the 6 cent beat folks didn’t like the report because of weak comp (comparable) sales which sets up a day trade at support at $119.25.
The large green candlestick at the bottom of the chart is called a Bullish Engulfing candle which indicates a reversal in the stock. I bought at $119.61 and entered at stop market order at $119.44, 2 cents under the low of the day.
The two circled area’s on the $119.75 line were resistance. Noticed that the third hit on that blow on through. That’s because all the the sellers at that level were finally filled. I sold half this position at $119.94 (first resistance was at $119.95), brought my stop price up to $119.64.
Next resistance is yesterday’s low of $120.97. That’s my target.