McDonalds (MCD) is scheduled to report Q4 earnings before the open tomorrow. The company reported last quarter's earnings at 7:58 am ET (and a conference call is scheduled for 11:00 am ET)

Consensus estimates Q4 adj. EPS of $1.59 (vs. $1.43 last year) on revs of $5.23 bln (-13% Y/Y).

IMPORTANCE:

• MCD is the sixth highest-priced stock in the price-weighted Dow Jones Industrial Average
• Company, including franchisees, is one of the largest employers in the U.S., so what it says about wage trends will carry some influence in terms of affecting inflation expectations and profit margins for industry peers and other services-providing companies
• McDonald's is a multinational company, deriving close to 70% of its 2016 revenue outside the U.S., so it provides telling insight on global consumer spending activity and the impact of foreign exchange
• Expectations are  high for McDonald's as it has renewed sales momentum with the popularity of its value menu, All-Day breakfast offering, and streamlined menu options.
   

AFTER 3Q REPORT:

Positive comparable sales and guest counts across all of our operating segments during the third quarter demonstrate broad-based momentum throughout our business that builds upon our strong first half of 2017

TECHS:

The stock, which is trading at an all-time high, could be at risk of a material sell-off if McDonald's fails to live up to the high expectations with its results and/or outlook.

Stocks in Play

• MCD
• YUM Brands (YUM)
  • Wendy's (WEN)
  • Jack in the Box (JACK)
  • Restaurant Brands International (QSR) [parent of Burger King and Tim Hortons]
  • Sonic (SONC)
  • Shake Shack (SHAK)
  • Red Robin Gourmet (RRGB)

Related specialty restaurant companies

• Starbucks (SBUX)
• Dunkin Donuts (DNKN)
   
• Consumer Discretionary Select Sector SPDR (XLY)