Can McDonald's Maintain Its Strong 1Q16 Momentum?
Investors should look at valuation multiples when deciding whether to enter or exit a stock. Valuation multiples are driven by perceived growth, risk and uncertainties, and investors’ willingness to pay for a stock. There are various multiples used to evaluate a stock. In this article, we’ll use the PE (price-to-earnings) ratio due to its high visibility in McDonald’s (MCD) earnings. The forward PE ratio is calculated by dividing the current share price by the forecasted earnings per share for the next 12 months.
MCD’s PE multiple
Since the beginning...