Blue-Chip Fast Food Stock Gears Up for Q4 Earnings

The security currently sports attractively priced premiums

Deputy Editor
Jan 26, 2021 at 2:47 PM
facebook X logo linkedin


Blue-chip McDonald's Corp (NYSE:MCD) is preparing to report fourth-quarter earnings and revenue before the bell on Thursday. Ahead of the event, analysts expect the fast food titan to post earnings of $1.78 per share, as well as rise in year-over-year revenue thanks to efforts that ensure customers have low-contact ways to dine during the Covid-19 pandemic. 

At last check, MCD shares were higher, up 0.6% at $214.55. The equity added 15.4% over the last nine months, though the 80-day moving average has kept a lid on most rally attempts. Meanwhile, the $208 level has contained any sharper pullbacks during that timeframe.

MCD Chart January 26_2

Digging deeper, McDonald's stock has moved lower after five of its last eight earnings reports, including a 5% drop in October of 2019. On average, MCD experienced a post-earnings swing of 1.5% over the past two ears, regardless of direction. This time around, the options market is pricing in a bigger-than-usual move of 3.8%.

As far as sentiment is concerned, it looks like the MCD's options pits are bullish. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security has racked up a 50-day put/call volume ratio of 2.49, which stands  in the 89th percentile of its annual range. In other words, options buyers have been initiating bearish bets  at a faster-than-usual clip during the past ten weeks.

Now looks like a good time to speculate on McDonald's stock with options, too. This is per the equity's Schaeffer's Volatility Index (SVI) of 25%, which sits in the relatively low 15th annual percentile of readings from the past year. This reveals that low volatility expectations are being priced into near-term contracts -- a boon to potential buyers.

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI