McDonald's (MCD) AI Stock Analysis

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McDonald's

(NYSE:MCD)

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Neutral 64 (OpenAI - 4o)

Rating:64Neutral

Price Target:

$322.00

▲(6.93% Upside)

McDonald's overall stock score is driven by strong financial performance and international growth, tempered by technical weakness and challenges in the U.S. market. The high leverage and premium valuation are notable risks.

Positive Factors

Global Sales Growth

Strong global sales growth indicates McDonald's ability to expand its market presence and adapt to diverse consumer needs, supporting long-term revenue stability.

Digital and Technology Advancements

Investments in digital technology enhance operational efficiency and customer experience, positioning McDonald's for sustained competitive advantage.

International Market Success

Strong international market performance reflects McDonald's ability to capture growth opportunities outside the U.S., diversifying its revenue base.

Negative Factors

High Leverage

High leverage can limit financial flexibility and increase risk, potentially impacting McDonald's ability to invest in growth initiatives.

U.S. Consumer Challenges

Declining visits from low-income consumers in the U.S. could hinder growth in McDonald's largest market, affecting overall sales performance.

Inflationary Pressures

Inflationary pressures, especially in key markets like Europe, can strain margins and complicate pricing strategies, affecting profitability.

McDonald's (MCD) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$217.63B

Dividend Yield2.35%

Average Volume (3M)3.08M

Price to Earnings (P/E)26.0

Beta (1Y)0.31

Revenue Growth1.17%

EPS Growth2.09%

CountryUS

Employees150,000

SectorConsumer Cyclical

Sector Strength84

IndustryRestaurants

Share Statistics

EPS (TTM)3.19

Shares Outstanding713,604,430

10 Day Avg. Volume2,929,608

30 Day Avg. Volume3,083,549

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)N/A

P/FCF RatioN/A

Enterprise Value/Market Cap1.21

Enterprise Value/Revenue10.12

Enterprise Value/Gross Profit17.75

Enterprise Value/Ebitda18.50

Forecast

1Y Price Target

$322.80

Price Target Upside7.19% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering26

McDonald's Business Overview & Revenue Model

Company DescriptionMcDonald's Corporation operates and franchises McDonald's restaurants in the United States and internationally. Its restaurants offer hamburgers and cheeseburgers, chicken sandwiches and nuggets, wraps, fries, salads, oatmeal, shakes, desserts, sundaes, soft serve cones, bakery items, soft drinks, coffee, and beverages and other beverages, as well as breakfast menu, including biscuit and bagel sandwiches, breakfast burritos, hotcakes, and other sandwiches. As of December 31, 2021, the company operated 40,031 restaurants. McDonald's Corporation was founded in 1940 and is headquartered in Chicago, Illinois.

How the Company Makes MoneyMcDonald's generates revenue through a combination of company-operated restaurants and franchising fees. The primary revenue streams include sales from its own restaurants and rental income and royalties from franchisees. Franchisees pay an initial franchise fee and ongoing royalties based on a percentage of their sales. Additionally, McDonald's earns revenue from the sale of food and beverages, as well as through strategic partnerships, including collaborations with delivery services like Uber Eats and partnerships for promotional items. The company also benefits from economies of scale, allowing it to negotiate favorable terms with suppliers, ultimately contributing to its profitability.

McDonald's Key Performance Indicators (KPIs)

Any

Comparable Sales Growth

Comparable Sales Growth
Measures the increase or decrease in sales at existing locations, providing insight into the company's ability to grow sales without expanding its footprint. It reflects customer demand and operational efficiency.

Chart InsightsMcDonald's comparable sales growth has significantly slowed since its peak in 2021, with recent declines reflecting macroeconomic challenges. The latest earnings call highlights a 1% global comp sales decline, with a sharper 3.6% drop in the U.S. due to pressures on low and middle income consumers. Despite these challenges, the McValue platform and successful marketing campaigns are helping maintain a positive guest count gap. Internationally, mixed performance persists, but market share gains in France offer a silver lining. The company remains cautious but optimistic about achieving its 2025 financial targets.

Data provided by:

Main Street Data

McDonald's Earnings Call Summary

Earnings Call Date:Aug 07, 2025

(Q2-2025)

% Change Since: |

Next Earnings Date:Oct 23, 2025

Earnings Call Sentiment Neutral

The earnings call displayed a mix of positive outcomes in international markets and digital advancements, contrasted by challenges in the U.S. market due to declining low-income consumer visits and inflationary pressures. Despite these challenges, there is optimism with strategic efforts in menu pricing and technology enhancements.

Q2-2025 Updates

Positive Updates

Global Sales Growth

McDonald's delivered global system-wide sales growth of over 6% in constant currency and global comparable sales growth of nearly 4%, with positive guest counts globally.

International Market Success

Internationally Operated Market segment comp sales increased by 4%, with all markets driving positive growth. International Developmental Licensed Markets delivered over 5.5% comp sales growth, led by Japan.

Strong Performance in Germany

Germany achieved positive sales and guest count gaps versus competitors and gained market share with a clear EDAP menu and new marketing strategies like the Chicken Big Mac.

Digital and Technology Advancements

Progress in digital initiatives such as edge computing with Google, geofencing technology, and a global finance system aimed at modernizing operations and enhancing customer experiences.

U.S. Consumer Engagement

The $5 Meal Deal and the reintroduction of Snack Wraps at a $2.99 price point showed positive consumer responses, with franchisees supporting nationally advertised pricing.

Negative Updates

U.S. Consumer Challenges

Comp sales in the U.S. were up only 2.5%, with low-income consumer visits declining by double digits, contributing to overall challenging QSR traffic.

Inflationary Pressures

Continued high inflation impacted operations, particularly in Europe where beef prices increased by 20%, causing challenges in pricing and menu strategies.

Breakfast Daypart Weakness

Breakfast remains the most economically sensitive daypart, with industry-wide declines as consumers opt to skip breakfast or eat at home.

Company Guidance

During McDonald's Second Quarter 2025 Investor Conference Call, the company reported a global system-wide sales growth of over 6% in constant currency and a global comparable sales increase of nearly 4%. The Internationally Operated Market (IOM) segment saw 4% comp sales growth, while the International Developmental Licensed (IDL) Markets reported comp sales growth of more than 5.5%, led by Japan. In the U.S., comp sales rose by 2.5%. The company aims to reach 250 million 90-day active loyalty users by the end of 2027 and has already achieved over 185 million across 60 markets. Adjusted earnings per share for the quarter were $3.19, with an adjusted operating margin of nearly 47% for the first half of the year. McDonald's plans to open approximately 2,200 restaurants globally in 2025, with a target of slightly over 4% unit growth. Despite industry headwinds, McDonald's remains confident in its ability to drive long-term profitable growth.

McDonald's Financial Statement Overview

Summary

McDonald's demonstrates strong profitability with a consistent increase in gross profit margin and EBIT margin. However, high leverage and negative equity on the balance sheet pose financial risks. Robust cash flow generation supports dividends and buybacks, but future stability may be threatened by market changes.

Income Statement

Very Positive

McDonald's demonstrates strong profitability with a consistent increase in gross profit margin and EBIT margin over the years. The TTM (Trailing-Twelve-Months) gross profit margin is approximately 56.8%, and the EBIT margin is 45.2%, indicating efficient cost management and operational excellence. Revenue growth has been steady, with a notable increase in recent years. However, slightly declining revenue in the TTM compared to 2024 could be an area to monitor.

Balance Sheet

Neutral

The balance sheet reflects high leverage, with a negative stockholders' equity indicating more liabilities than assets. The debt-to-equity ratio is not meaningful due to negative equity, but the company maintains a significant level of total debt. Despite this, McDonald's has managed to operate with a consistent return on equity, underlining its ability to generate profits. The equity ratio is negative, suggesting high financial risk due to leverage.

Cash Flow

Positive

McDonald's shows robust cash flow generation with a strong operating cash flow to net income ratio of 1.16 in the TTM, reflecting effective cash conversion from earnings. Free cash flow growth is consistent, supporting dividend payments and share buybacks. However, the company's high leverage may pose risks to future cash flow stability if market conditions change.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	26.06B	25.92B	25.50B	23.18B	23.22B	19.21B
Gross Profit	14.85B	14.71B	14.56B	13.21B	12.58B	9.75B
EBITDA	14.25B	13.95B	13.86B	10.90B	12.18B	9.11B
Net Income	8.39B	8.22B	8.47B	6.18B	7.55B	4.73B
Balance Sheet
Total Assets	59.55B	55.18B	56.15B	50.44B	53.85B	52.63B
Cash, Cash Equivalents and Short-Term Investments	1.88B	1.08B	4.58B	2.58B	4.71B	3.45B
Total Debt	55.87B	51.95B	53.09B	48.70B	49.35B	51.46B
Total Liabilities	62.31B	58.98B	60.85B	56.44B	58.46B	60.45B
Stockholders Equity	-2.76B	-3.80B	-4.71B	-6.00B	-4.60B	-7.82B
Cash Flow
Free Cash Flow	6.90B	6.67B	7.25B	5.49B	7.10B	4.62B
Operating Cash Flow	9.79B	9.45B	9.61B	7.39B	9.14B	6.27B
Investing Cash Flow	-3.65B	-5.35B	-3.18B	-2.68B	-2.17B	-1.55B
Financing Cash Flow	-5.06B	-7.50B	-4.37B	-6.58B	-5.60B	-2.25B

McDonald's Technical Analysis

Technical Analysis Sentiment

Negative

Last Price301.14

Price Trends

50DMA

304.47

Negative

100DMA

303.81

Negative

200DMA

299.83

Positive

Market Momentum

MACD

-0.57

Positive

RSI

39.75

Neutral

STOCH

20.25

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MCD, the sentiment is Negative. The current price of 301.14 is below the 20-day moving average (MA) of 309.93, below the 50-day MA of 304.47, and above the 200-day MA of 299.83, indicating a neutral trend. The MACD of -0.57 indicates Positive momentum. The RSI at 39.75 is Neutral, neither overbought nor oversold. The STOCH value of 20.25 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MCD.

McDonald's Risk Analysis

McDonald's disclosed 33 risk factors in its most recent earnings report. McDonald's reported the most risks in the "Finance & Corporate" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

McDonald's Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DPZ	71 Outperform	14.88B	25.44	-15.02%	1.56%	3.65%	5.71%
CMG	67 Neutral	53.19B	35.19	43.70%	―	8.57%	10.72%
SBUX	66 Neutral	94.60B	35.99	-50.49%	2.92%	0.60%	-35.19%
MCD	64 Neutral	$217.63B	25.98	-216.57%	2.35%	1.17%	2.09%
WEN	63 Neutral	1.80B	9.88	170.14%	8.19%	1.31%	-1.46%
YUM	62 Neutral	41.15B	29.28	-18.65%	1.93%	11.30%	-7.82%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

* Consumer Cyclical Sector Average

Performance Comparison

MCD

McDonald's

301.14

13.99

4.87%

CMG

Chipotle

39.81

-18.16

-31.33%

DPZ

Domino's Pizza

430.08

24.52

6.05%

SBUX

Starbucks

83.42

-11.07

-11.72%

WEN

Wendy's

9.52

-7.38

-43.67%

YUM

Yum! Brands

145.26

16.67

12.96%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Sep 19, 2025