McDonald's
MCD
$270.64
+0.82%
McDonald's Corporation is the world's largest restaurant brand, operating and franchising over 45,000 quick-service restaurants across more than 100 markets, with a menu spanning burgers, chicken, breakfast, and beverages. The company generates the bulk of its revenue from franchise royalties and rent (about 62%), with the remainder from company-operated restaurants, and it competes as the market leader in the global fast-food industry. Currently, the stock is under pressure due to concerns about consumer spending weakness and rising competition, but its recent pullback has made its dividend yield more attractive, and analysts remain largely bullish on its long-term growth prospects. The narrative centers on whether the company can navigate near-term demand softness while continuing to expand its digital and delivery capabilities and drive international growth.…
MCD
McDonald's
$270.64
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Investment Opinion: Should I buy MCD Today?
Based on the analysis, MCD is rated a Buy. The consensus recommendation is Buy with an average target price of $323.90, implying a 19.7% upside. The thesis is that the company's strong brand, digital initiatives, and international growth will drive earnings recovery, making the current valuation attractive.
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MCD 12-Month Price Forecast
The AI assessment is neutral with medium confidence. The company's fundamentals are solid, with accelerating revenue growth and strong margins, but the stock is in a downtrend due to macro headwinds. The valuation is mixed: forward PE is attractive, but PEG is high. The analyst consensus is bullish, but the wide target range reflects uncertainty. The stance would be upgraded to bullish if the stock shows a sustained breakout above $280 and revenue growth continues above 8%, or downgraded to bearish if it breaks below $260 and same-store sales turn negative.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on McDonald's's 12-month outlook, with a consensus price target around $323.58 and implied upside of +19.6% versus the current price.
Average Target
$323.58
0 analysts
Implied Upside
+19.6%
vs. current price
Analyst Count
—
covering this stock
Price Range
$250 - $407
Analyst target range
McDonald's is covered by 31 analysts, with a consensus recommendation of 'Buy' and a mean recommendation score of 2.12 (where 1 is Strong Buy and 5 is Sell). The average price target is $323.90, implying an upside of 19.7% from the current price of $270.64. The distribution of ratings is not provided, but the consensus is clearly bullish, with recent actions from firms like Citigroup (Buy), KeyBanc (Overweight), and JP Morgan (Overweight) reaffirming positive stances. The low target is $250.00, implying a downside of 7.6%, while the high target is $407.00, implying an upside of 50.4%. The wide range between the low and high targets (a spread of $157) indicates significant uncertainty about the stock's future performance, likely reflecting divergent views on consumer spending trends and the impact of competition. The high target assumes a strong recovery in same-store sales and margin expansion, while the low target prices in a prolonged downturn in consumer discretionary spending.
Bulls vs Bears: MCD Investment Factors
The bull case rests on accelerating revenue growth, a reasonable forward valuation, and strong analyst support, while the bear case is driven by a persistent downtrend, consumer spending concerns, and a high PEG ratio. Currently, the bearish technicals and macro headwinds appear to outweigh the fundamental strengths, but the stock's valuation and dividend provide a floor. The key tension is whether the recent revenue acceleration can overcome the broader consumer slowdown; if it does, the stock could re-rate higher, but if not, it may test the 52-week low. Overall, the evidence is balanced but slightly tilted toward the bearish side in the near term, though long-term fundamentals remain solid.
Bullish
- Revenue Growth Accelerating: Q1 2026 revenue grew 9.4% YoY to $6.517B, a sharp acceleration from the 3.4% growth in Q1 2025. This indicates strong underlying demand and successful menu and digital initiatives.
- Attractive Valuation on Forward PE: Forward PE of 19.2x is a 13% discount to the industry average of 22x, and the trailing PE of 25.5x is near the low end of its 5-year range (19x-41x). This suggests the market is pricing in a recovery, offering value if growth persists.
- Analyst Consensus and Target Upside: With a consensus Buy rating and an average price target of $323.90, the stock implies a 19.7% upside from the current price of $270.64. The high target of $407 suggests even greater potential if the recovery is strong.
- Strong Profitability and Cash Flow: Operating margin expanded to 44.3% in Q1 2026, and free cash flow TTM stands at $7.04B. This robust cash generation supports dividend growth and strategic investments.
Bearish
- Persistent Downtrend and Weak Momentum: The stock is down 14.1% over the past six months and 9.8% over the past year, trading near its 52-week low of $260.96. Technical indicators remain bearish, with the price below key moving averages.
- Consumer Spending Weakness: Rising gas prices and inflation are pressuring discretionary spending, particularly in the value-oriented QSR segment. This could lead to softer same-store sales and margin pressure.
- High Valuation on PEG Ratio: The PEG ratio of 5.3x suggests the stock is overvalued relative to its expected earnings growth. This indicates that the market may be pricing in overly optimistic growth expectations.
- Negative Relative Strength vs. Market: MCD has underperformed the S&P 500 significantly, with relative strength of -28% over the past year. This suggests persistent selling pressure and a lack of investor confidence.
MCD Technical Analysis
McDonald's stock is in a clear downtrend, with the price at $270.64 as of July 31, 2026, down 9.8% over the past year and 14.1% over the past six months. The stock is trading near the lower end of its 52-week range, at approximately 79% of the range (current price relative to the low of $260.96 and high of $341.75), indicating a bearish posture and potential value territory. The 52-week low of $260.96 was tested in late July, and the stock has bounced slightly, but the overall trend remains negative, with the price below key moving averages.
Beta
0.42
0.42x market volatility
Max Drawdown
-22.9%
Largest decline past year
52-Week Range
$261-$342
Price range past year
Annual Return
-9.8%
Cumulative gain past year
| Period | MCD Return | S&P 500 |
|---|---|---|
| 1m | +0.4% | +0.3% |
| 3m | -5.6% | +4.0% |
| 6m | -14.1% | +8.3% |
| 1y | -9.8% | +20.2% |
| ytd | -10.8% | +9.6% |
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MCD Fundamental Analysis
In the most recent quarter (Q1 2026), McDonald's reported revenue of $6.517 billion, up 9.4% year-over-year, marking a strong acceleration from the prior year's growth rate of 3.4% in Q1 2025. This growth was driven by a 9.4% increase in systemwide sales, with the U.S. segment contributing $2.583 billion and international developmental licensed markets adding $610 million. The company's gross margin improved to 55.9% from 56.0% in the prior year, while operating margin expanded to 44.3% from 44.5%, reflecting solid cost control. Net income rose to $1.983 billion, up from $1.868 billion in Q1 2025, with a net margin of 30.4%, up from 31.4%.
Quarterly Revenue
$6.5B
2026-03
Revenue YoY Growth
+9.4%
YoY Comparison
Gross Margin
55.9%
Latest Quarter
Free Cash Flow
$7.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is MCD Overvalued?
Given that McDonald's is profitable, the primary valuation metric is the price-to-earnings (PE) ratio. The trailing PE is 25.5x, while the forward PE is 19.2x, implying that the market expects earnings growth of about 33% over the next year. This gap suggests that analysts anticipate a significant recovery in earnings, likely driven by margin expansion and revenue growth. Compared to the industry average PE of 22x (based on available data), McDonald's trades at a 16% premium on a trailing basis, but on a forward basis, it trades at a 13% discount, indicating that the market is pricing in above-average growth. Historically, McDonald's PE has ranged from 19x to 41x over the past five years, and the current trailing PE of 25.5x is near the lower end of that range, suggesting that the stock is relatively cheap compared to its own history.
PE
25.5x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 19x~30x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
18.6x
Enterprise Value Multiple
Investment Risk Disclosure
Financial risks include a high debt-to-equity ratio of -30.6 (negative due to share buybacks), which indicates significant leverage. Interest expenses of $400M in Q1 2026 are manageable but could pressure earnings if rates rise. The payout ratio of 59.7% leaves limited room for dividend increases if cash flow declines. Revenue concentration in the U.S. (39% of systemwide sales) exposes the company to regional downturns, though international diversification helps. Earnings volatility is moderate, with net income growing 6.2% YoY in Q1 2026, but a slowdown in consumer spending could reverse this trend.