It has been about a month since the last earnings report for McDonald's (MCD -Free Report) . Shares have added about 5% in the past month, easily outperforming broad markets in that time frame.

Will the recent positive trend continue leading up to their next earnings release, or is the stock due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Recent Earnings: McDonald's Tops Q3 Earnings on Solid Comps Growth

McDonald's posted robust results in the third quarter of 2016, wherein both the bottom line and the top line outpaced the Zacks Consensus Estimate.

Earnings and Revenue Discussion

Earnings per share (EPS) of $1.62 surpassed the Zacks Consensus Estimate of $1.48 by 9.5% and improved 15.7% from the year-ago quarter. The upside can be attributed to the turnaround plan announced by CEO Steve Easterbrook in May 2015.

Meanwhile, foreign currency translation had a negative impact of $0.03 per share on earnings in the quarter. Notably, at constant currency, earnings grew 17% year over year.

Revenues of $6.42 billion fell 3% year over year mainly due to the impact of refranchising and currency headwinds. At constant currency, the figure declined 1%. Revenues, however, surpassed the Zacks Consensus Estimate of $6.29 billion by 2.1%.

Behind the Headlines Numbers

In the quarter, revenues at company-operated restaurants declined 7.3% to $3.97 billion. Revenues at franchise-operated restaurants, however, grew 5.1% to $2.45 billion.

Global comps grew 3.5%, supported by positive comps across all the segments, marking the fifth consecutive quarter of positive comparable sales. Moreover, comps compared favorably with last quarter’s increase of 3.1%.

Key Segment Details

U.S.: Comps grew 1.3% in the third quarter, reflecting the success of the All Day Breakfast platform launched in 2015 and the popularity of the company’s national value platform – McPick 2. The introduction of Chicken McNuggets with no artificial preservatives also boosted the segment’s performance. However, comps growth was less than the prior-quarter improvement of 1.8% due to softening industry growth.

Segment operating income jumped 8%, mainly driven by improved restaurant profitability and higher gains from refranchising.

Going forward, the company will remain focused on expanding its All Day Breakfast menu, the quality of food and on enhancing guest experience.

International Lead Markets: Comps at the International Lead Markets segment grew 3.3%, driven by strong performance in the U.K. and upbeat results in Australia, Canada and Germany. The upside reflects multiple menu, service and value initiatives across most of the markets, which led to positive consumer response. Moreover, comps were better than an increase of 2.6% recorded last quarter.

Operating income was up 2%, including the impact of foreign exchange headwinds. At constant currency, the figure was up 5% on the back of sales-driven improvements in franchised margin dollars across most markets.

High-Growth Markets: Comps grew 1.5% in High-Growth Markets, as positive performance in almost all markets was partially offset by negative comparable sales in China due in part to temporary protests concerning events surrounding the South China Sea and strong prior-year comparisons. Notably, comps had witnessed growth of 1.6% last quarter.

The segment's operating income rose 8% (10% in constant currencies) fueled by improved restaurant profitability in China, which benefited from the recent VAT reform.
 

How have estimates been moving since then?

It turns out, fresh estimates flatlined during the month following earnings, at least when looking at the current quarter. MCD's prospects for the full year are brighter, as the consensus estimate here has been on the rise over the past month and analysts are now expecting EPS growth close to 15% year-over-year.

Arguably, the long-term turnaround in the fortunes of McDonald's shareholders is continuing, as evidenced by the chart below:

MCDONALDS CORP Price and Consensus

MCDONALDS CORP Price and Consensus | MCDONALDS CORP Quote

VGM Scores

At this time, McDonald's stock has a nice Growth score of 'B', though it is lagging a lot on the momentum front with a 'D'. Charting a somewhat similar path, the stock was allocated a grade of 'C' on the value side, putting it in the third quintile for this investment strategy.Overall though, the company is just average from a fundamental look, as its VGM score comes in at 'C', putting it into the middle 20% of all companies we study. 

Outlook

Thanks to the positive longer term trends in estimates for MCD, shares of the stock have a Zacks Rank # 2 (buy). This means that we are expecting the run in MCD to continue, and we are looking for more outperformance in the weeks ahead too.