McDonald's (MCD)
NYSE:MCD
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McDonald's
(NYSE:MCD)
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Rating:66Neutral
Price Target:
$298.00
▼(-4.29% Downside)
Action:Reiterated
Date:05/09/26
Score is driven by strong underlying business profitability and cash generation plus a constructive earnings outlook with targets reaffirmed. This is tempered by balance-sheet risk (high leverage/negative equity) and notably weak near-term technical momentum with the stock trading below key moving averages and bearish MACD. Valuation is moderate-to-premium with a supportive dividend yield.
Positive Factors
Sector-leading margins
Sustained high operating and net margins indicate durable pricing power, efficient operations, and strong unit economics across the system. These margins provide long-term capacity to fund marketing, reinvestment, and partner support while absorbing moderate cost shocks without structural profit erosion.
Negative Factors
High leverage / negative equity
Elevated absolute debt and negative shareholder equity constrain financial flexibility and raise refinancing and covenant risk if funding costs rise. This capital structure reduces the company's ability to absorb prolonged downturns, increases interest expense sensitivity, and limits optionality for large strategic moves.
Read all positive and negative factors
Positive Factors
Negative Factors
Sector-leading margins
Sustained high operating and net margins indicate durable pricing power, efficient operations, and strong unit economics across the system. These margins provide long-term capacity to fund marketing, reinvestment, and partner support while absorbing moderate cost shocks without structural profit erosion.
Read all positive factors
McDonald's Key Performance Indicators (KPIs)
Any
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.
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.
Data provided by:
The Fly
The FlyMcDonald's (MCD) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$196.38B
Dividend Yield2.31%
Average Volume (3M)2.91M
Price to Earnings (P/E)27.8
Beta (1Y)0.25
Revenue Growth6.76%
EPS Growth6.96%
CountryUS
Employees150,000
SectorConsumer Cyclical
Sector Strength84
IndustryRestaurants
Share Statistics
EPS (TTM)12.17
Shares Outstanding710,505,860
10 Day Avg. Volume2,775,483
30 Day Avg. Volume2,910,863
Financial Highlights & Ratios
PEG Ratio5.30
Price to Book (P/B)-121.81
Price to Sales (P/S)8.11
P/FCF Ratio30.34
Enterprise Value/Market Cap1.27
Enterprise Value/Revenue9.11
Enterprise Value/Gross Profit15.89
Enterprise Value/Ebitda16.76
Forecast
1Y Price Target
$333.55Price Target Upside7.13% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering25
EPS Forecast (FY)13
Revenue Forecast (FY)$28.52B
McDonald's Business Overview & Revenue Model
Company Description
McDonald'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, su...
How the Company Makes Money
McDonald’s primarily makes money through a blended model of (1) franchise-related income and (2) sales from company-operated restaurants. A significant portion of its business is franchised: franchisees operate restaurants under the McDonald’s bra...
McDonald's Earnings Call Summary
Earnings Call Date:May 07, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 29, 2026
Earnings Call Sentiment Positive
The call highlighted broad, consistent top-line momentum across McDonald's global system: global comps up 3.8%, U.S. comps up 3.9%, strong international market performance (U.K., Germany, Australia), solid adjusted EPS of $2.83 and robust operating margin (46%). Management emphasized successful value repositioning (new McValue/EDAP menus), scalable marketing partnerships, and early traction from a new beverage platform, while reaffirming full-year targets and development ambitions (~1,000 China openings; ~50,000 restaurants by 2027). Notable operational challenges were acknowledged, including unacceptable U.S. company-operated margins, franchisee profitability pressure from commodity and gas price inflation, a discrete April comp lapse vs a tough prior-year promotion, and market-specific underperformance in France. Despite those headwinds and risks from inflation, supply chain volatility and geopolitical uncertainty, the balance of positive metrics, market share gains, and management confidence in execution led to an overall constructive tone.Positive Updates
Global Sales and Comparable Growth
Global system-wide sales grew 6% in constant currency and global comparable sales increased 3.8%. Management reported market share gains in nearly all of McDonald's top 10 markets.
Negative Updates
U.S. Company-Operated Margin Weakness
Management stated U.S. company-operated (McOpCo) margins were 'not acceptable' in the quarter. Factors cited include increased labor investment combined with restrained pricing discipline. Company is actively reviewing opportunities to improve performance and the franchisee vs company ownership mix.
Read all updates
Q1-2026 Updates
Positive
Negative
Global Sales and Comparable Growth
Global system-wide sales grew 6% in constant currency and global comparable sales increased 3.8%. Management reported market share gains in nearly all of McDonald's top 10 markets.
Read all positive updates
Company Guidance
McDonald’s reaffirmed its full‑year 2026 financial targets while quantifying several near‑term expectations: Q1 adjusted EPS was $2.83 (including a $0.13 FX benefit, ~+1% on a constant‑currency basis), global system‑wide sales grew 6% in constant currency and global comparable sales were +3.8% (U.S. comps +3.9%, IOM comps +3.9%, IDL comps +3.4%), restaurant margins exceeded $3.6 billion and adjusted operating margin was 46%; the company expects a full‑year FX tailwind to EPS of ~$0.20–$0.30 based on current rates, anticipates a meaningful Q2 comp deceleration versus Q1 (driven by an April lapping of the Minecraft promotion) but acceleration on a 2‑year stack, projects U.S. food and paper inflation in the low‑ to mid‑single‑digit range and IOM mid‑single digits, expects EVM franchisee support to be below the initial ~$35 million estimate, remains on track to open ~1,000 restaurants in China this year and to reach ~50,000 total restaurants by end‑2027, and noted hedging and supplier arrangements to help navigate near‑term cost pressures while acknowledging increased risk of higher inflation longer term.McDonald's Financial Statement Overview
Summary
Income Statement
90
Very Positive
Balance Sheet
38
Negative
Cash Flow
78
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 27.45B | 26.89B | 25.92B | 25.50B | 23.18B | 23.22B |
| Gross Profit | 15.74B | 15.44B | 14.71B | 14.56B | 13.21B | 12.58B |
| EBITDA | 14.92B | 14.64B | 13.95B | 13.86B | 10.90B | 12.18B |
| Net Income | 8.68B | 8.56B | 8.22B | 8.47B | 6.18B | 7.55B |
Balance Sheet | ||||||
| Total Assets | 60.04B | 59.52B | 55.18B | 56.15B | 50.44B | 53.85B |
| Cash, Cash Equivalents and Short-Term Investments | 1.17B | 774.00M | 1.08B | 4.58B | 2.58B | 4.71B |
| Total Debt | 54.88B | 54.81B | 51.95B | 53.09B | 48.70B | 49.35B |
| Total Liabilities | 61.32B | 61.30B | 58.98B | 60.85B | 56.44B | 58.46B |
| Stockholders Equity | -1.29B | -1.79B | -3.80B | -4.71B | -6.00B | -4.60B |
Cash Flow | ||||||
| Free Cash Flow | 7.04B | 7.19B | 6.67B | 7.25B | 5.49B | 7.10B |
| Operating Cash Flow | 10.54B | 10.55B | 9.45B | 9.61B | 7.39B | 9.14B |
| Investing Cash Flow | -3.83B | -3.82B | -5.35B | -3.18B | -2.68B | -2.17B |
| Financing Cash Flow | -6.81B | -7.13B | -7.50B | -4.37B | -6.58B | -5.60B |
McDonald's Technical Analysis
Positive
311.36
Price Trends
319.27
Negative
313.89
Negative
306.77
Positive
Market Momentum
-3.15
Negative
50.20
Neutral
65.15
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MCD, the sentiment is Positive. The current price of 311.36 is above the 20-day moving average (MA) of 307.73, below the 50-day MA of 319.27, and above the 200-day MA of 306.77, indicating a neutral trend. The MACD of -3.15 indicates Negative momentum. The RSI at 50.20 is Neutral, neither overbought nor oversold. The STOCH value of 65.15 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $34.61B | 18.97 | 27.14% | 3.60% | 9.26% | -3.76% | |
67 Neutral | $41.33B | 24.92 | -23.33% | 1.84% | 9.65% | 23.32% | |
66 Neutral | $196.38B | 27.85 | -433.95% | 2.31% | 6.76% | 6.96% | |
65 Neutral | $41.88B | 34.31 | 48.45% | ― | 5.67% | -4.28% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
59 Neutral | $10.06B | 22.18 | -15.04% | 1.63% | 5.17% | -0.62% | |
53 Neutral | $1.53B | 7.07 | 150.73% | 8.15% | -1.84% | -17.48% |
* Consumer Cyclical Sector Average
MCD
McDonald's
276.39
-37.58
-11.97%
CMG
Chipotle
32.65
-19.62
-37.54%
DPZ
Domino's Pizza
302.29
-186.94
-38.21%
WEN
Wendy's
8.02
-3.59
-30.93%
YUM
Yum! Brands
149.97
3.15
2.14%
QSR
Restaurant Brands International
75.84
7.05
10.25%
McDonald's Corporate Events
Business Operations and StrategyExecutive/Board Changes
McDonald’s Adds Ford CEO Farley to Board
Positive
Feb 10, 2026
On February 4, 2026, McDonald’s Corporation expanded its Board of Directors from 11 to 12 members and elected James D. Farley, Jr., President and CEO of Ford Motor Company, as a new independent director. Farley will receive standard non-empl...
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.