McDonald's
MCD
$252.53
-0.21%
McDonald's Corporation is the world's largest fast-food restaurant chain, operating and franchising over 45,000 locations across more than 100 markets, with a menu spanning burgers, chicken, breakfast items, and beverages. The company derives roughly 62% of its revenue from franchise royalties and rent, with the remainder from company-operated restaurants, and it competes as the industry leader in the quick-service restaurant (QSR) sector. Currently, the stock is under pressure due to concerns about consumer spending weakness, rising gas prices, and a broader market selloff, which has pushed shares to multi-year lows and sparked debate about whether the market has overreacted to near-term headwinds. Investors are also focused on McDonald's strategic initiatives, including menu innovation and digital growth, as well as its status as a dividend aristocrat with a 49-year streak of dividend increases.…
MCD
McDonald's
$252.53
Related headlines
Investment Opinion: Should I buy MCD Today?
Rating: Buy. The stock is attractively valued at 18.3x forward earnings, with a consensus Buy rating and 23.4% upside to the average target. The thesis is that MCD's global scale, franchise model, and digital initiatives will drive earnings growth that the market is underestimating.
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MCD 12-Month Price Forecast
The AI model assesses MCD as a bullish opportunity over the next 12 months, driven by its attractive valuation, strong cash generation, and global growth potential. The main uncertainty is consumer spending, but the stock's low beta and defensive characteristics provide a cushion. If same-store sales stabilize and the company meets earnings estimates, the stock should re-rate toward the average target. A downgrade would occur if revenue growth decelerates below 4% or if the stock breaks below $250.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on McDonald's's 12-month outlook, with a consensus price target around $315.39 and implied upside of +24.9% versus the current price.
Average Target
$315.39
0 analysts
Implied Upside
+24.9%
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 rating of 2.06 (where 1 is Strong Buy and 5 is Sell). The average price target is $315.39, implying a substantial 23.4% upside from the current price of $255.69, while the low target of $250.00 is just 2.2% below the current price, and the high target of $407.00 suggests a 59.2% upside. The wide range between low and high targets indicates high uncertainty about the company's near-term recovery, but the bullish consensus and recent ratings actions—such as Citigroup's Buy and KeyBanc's Overweight—suggest that analysts view the current pullback as an attractive entry point for long-term investors.
Bulls vs Bears: MCD Investment Factors
The bull case rests on MCD's proven business model, accelerating revenue growth, and a valuation that has rarely been cheaper relative to history. The bear case centers on a deteriorating consumer environment, negative momentum, and the risk that near-term headwinds persist. Currently, the evidence slightly favors the bulls given the analyst consensus and the stock's long-term track record, but the key tension is whether the market's pessimism about consumer spending is overdone or justified. If same-store sales stabilize and inflation eases, the stock could re-rate; if not, further downside is possible.
Bullish
- Revenue growth accelerating: Q1 2026 revenue grew 9.4% YoY to $6.517B, up from 4.9% in Q1 2025, driven by strong international segments. This acceleration shows the company's global scale and pricing power despite consumer headwinds.
- Attractive valuation vs history: Forward PE of 18.3x is well below the 5-year average of ~27x, and trailing PE of 25.5x is also below that average. The stock trades near its 52-week low, offering a potential margin of safety if earnings meet expectations.
- Analyst consensus bullish: 31 analysts rate MCD a Buy with a mean rating of 2.06 (1=Strong Buy). Average price target of $315.39 implies 23.4% upside from $255.69, with high target of $407 suggesting significant re-rating potential.
- Strong profitability and cash flow: Operating margin is 46.1% and net margin is 31.9%, reflecting the high-margin franchise model. Free cash flow TTM is $7.04B, supporting dividend growth and buybacks.
Bearish
- Stock in steep downtrend: MCD is down 19.3% over the past year and 22.1% over six months, trading just 0.1% above its 52-week low of $255.49. This persistent selling pressure suggests the market is pricing in more downside or a prolonged recovery.
- Consumer spending weakness: Rising gas prices (news) and inflation are pressuring low-income consumers, MCD's core demographic. Same-store sales growth has slowed, and the stock's underperformance vs S&P (relative strength -38% over 1 year) reflects these fears.
- High leverage and negative equity: Debt-to-equity is -30.6x and ROE is -478%, reflecting a large share buyback program that has reduced equity. While not unusual for MCD, it increases financial risk if cash flows decline.
- Valuation still not cheap on PEG: PEG ratio of 5.3x suggests the market is paying a premium for growth, which is expected to be modest. If growth disappoints, the stock could de-rate further.
MCD Technical Analysis
McDonald's stock is in a pronounced downtrend, having fallen 19.3% over the past year, with the current price of $255.69 sitting just 0.1% above its 52-week low of $255.49 and 25.2% below its 52-week high of $341.75. The stock is trading at the very bottom of its 52-week range, indicating persistent selling pressure and a lack of buyer conviction, which often signals either a value opportunity or a falling knife depending on fundamental catalysts. The 6-month price change of -22.1% and a max drawdown of -25.0% underscore the severity of the decline, with the stock consistently making lower lows since March 2026.
Beta
0.41
0.41x market volatility
Max Drawdown
-26.0%
Largest decline past year
52-Week Range
$252-$342
Price range past year
Annual Return
-18.1%
Cumulative gain past year
| Period | MCD Return | S&P 500 |
|---|---|---|
| 1m | -8.4% | -1.1% |
| 3m | -11.3% | +3.0% |
| 6m | -22.6% | +15.4% |
| 1y | -18.1% | +16.2% |
| ytd | -16.7% | +12.1% |
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MCD Fundamental Analysis
McDonald's revenue growth has been robust, with the most recent quarter (Q1 2026) showing revenue of $6.517 billion, up 9.4% year-over-year, accelerating from the 4.9% growth seen in Q1 2025. This growth is driven by strong performance in the International Developmental Licensed Markets segment, which contributed $610 million in revenue, and the High-Growth Markets segment at $3.325 billion, while the U.S. segment generated $2.583 billion. The company's revenue trajectory remains positive, supported by menu price increases and global expansion, though same-store sales growth has been a key metric to watch amid consumer caution.
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 McDonald's positive net income, the PE ratio is the primary valuation metric. The trailing PE stands at 25.5x, while the forward PE is 18.3x, implying that the market expects significant earnings growth, which is consistent with analyst estimates of EPS rising to $16.53 in the next fiscal year. The gap between trailing and forward PE suggests the market is pricing in a recovery in earnings, but the current valuation is below the 5-year average PE of around 27x, indicating a potential value opportunity if the company can deliver on growth expectations.
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 high leverage with a debt-to-equity ratio of -30.6x, reflecting aggressive share buybacks that have eroded equity. While operating cash flow is strong, the company's interest expense of $400M per quarter could become burdensome if revenues decline. The payout ratio of 59.7% leaves limited room for dividend increases if earnings drop, and the negative equity base amplifies the impact of any losses. However, the franchise model provides stable royalty income, and free cash flow of $7.04B covers dividends and debt service comfortably for now.