McDonald's (MCD) AI Stock Analysis

• Market Cap: $215.76B
• Dividend Yield: 2.28%
• Average Volume (3M): 2.90M
• Price to Earnings (P/E): 26.2
• Beta (1Y): 0.33
• Revenue Growth: 1.17%
• EPS Growth: 2.09%
• Country: US
• Employees: 150,000
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Restaurants
• EPS (TTM): 3.19
• Shares Outstanding: 713,604,430
• 10 Day Avg. Volume: 2,347,256
• 30 Day Avg. Volume: 2,901,051
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.22
• Enterprise Value/Revenue: 10.12
• Enterprise Value/Gross Profit: 17.75
• Enterprise Value/Ebitda: 18.50
• 1Y Price Target: $326.14
• Price Target Upside: 7.87% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 26

• Rating: 70 Outperform
• Price Target: $335.00 ▲(10.80% Upside)

McDonald's overall stock score reflects strong financial performance and international growth, tempered by high leverage and challenges in the U.S. market. Technical indicators suggest a neutral trend, while valuation metrics indicate moderate attractiveness. The earnings call provided a balanced view of opportunities and challenges, contributing positively to the score.

Positive Factors

Global Sales Growth

Strong global sales growth indicates McDonald's effective international expansion and adaptability, supporting long-term revenue stability.

Digital and Technology Advancements

Investments in digital and technology enhance operational efficiency and customer experience, crucial for sustaining competitive advantage.

Dividend Increase

Increasing dividends reflect confidence in the company's growth strategy and its ability to generate consistent cash flow, benefiting shareholders.

Negative Factors

High Leverage

High leverage poses financial risk, potentially limiting flexibility in investments and operations, impacting long-term financial health.

U.S. Market Challenges

Challenges in the U.S. market, particularly with low-income consumers, may hinder growth and require strategic adjustments to maintain market share.

Inflationary Pressures

Inflationary pressures, especially in key markets like Europe, can strain margins and necessitate pricing strategies that may affect consumer demand.

McDonald's Business Overview & Revenue Model

Company Description

McDonald's Corporation (MCD) is a global fast-food restaurant chain headquartered in Chicago, Illinois. It operates in the quick-service restaurant sector, primarily serving hamburgers, fries, chicken, salads, breakfast items, and beverages. As one of the largest and most recognizable brands in the world, McDonald's operates thousands of locations worldwide, offering both dine-in and drive-thru services. The company has also expanded its menu to include healthier options and is continually adapting to changing consumer preferences.

How the Company Makes Money

McDonald'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 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

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

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

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 Price: 302.35
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 302.35 is below the 20-day moving average (MA) of 302.93, below the 50-day MA of 305.93, and above the 200-day MA of 301.94, indicating a neutral trend. The MACD of 0.88 indicates Negative momentum. The RSI at 46.26 is Neutral, neither overbought nor oversold. The STOCH value of 33.40 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MCD.

McDonald's Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CMG	―	$53.98B	35.59	42.59%	―	8.57%	10.72%
MCD	―	$215.76B	26.24	―	2.28%	1.17%	2.09%
YUM	―	$38.63B	27.87	―	1.98%	11.30%	-7.82%
Sector *	―	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
SBUX	―	$95.68B	36.95	―	2.90%	0.60%	-35.19%
WEN	―	$1.64B	9.11	99.35%	8.93%	1.31%	-1.46%
DPZ	―	$13.71B	24.02	―	1.66%	3.92%	4.98%

McDonald's Corporate Events

McDonald’s Issues $1.3 Billion in Medium-Term Notes

On August 27, 2025, McDonald’s Corporation issued $550 million of 4.400% Medium-Term Notes due 2031 and $750 million of 5.000% Medium-Term Notes due 2036. This issuance is part of the company’s medium-term notes program, aiming to strengthen its financial position and support its strategic initiatives.

The most recent analyst rating on (MCD) stock is a Buy with a $360.00 price target. To see the full list of analyst forecasts on McDonald’s stock, see the MCD Stock Forecast page.

McDonald’s Reports Strong Q2 2025 Financial Results

McDonald’s Corporation is the world’s leading global foodservice retailer, operating over 44,000 locations in more than 100 countries, with the majority of its restaurants owned and operated by independent local business owners.

McDonald’s Earnings Call: Growth Amid U.S. Challenges

McDonald’s Corporation’s recent earnings call painted a picture of moderate growth and technological advancements, particularly in international markets. However, this optimism was tempered by challenges in the U.S. market, where inflation and decreased consumer visits have posed significant hurdles. While there are positive strides in loyalty programs and technology, the challenges in the U.S. market create a balanced sentiment overall.