McDonald's (MCD) AI Stock Analysis

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McDonald's

(NYSE:MCD)

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Neutral 65 (OpenAI - 4o)

Rating:65Neutral

Price Target:

$329.00

▲(6.32% Upside)

McDonald's overall score reflects strong financial performance and strategic growth initiatives, particularly in international markets. However, financial risks from high leverage and challenges in the U.S. market temper the score. The technical indicators suggest a neutral trend, and the valuation is moderate, contributing to a balanced outlook.

Positive Factors

Global Sales Growth

Consistent global sales growth indicates strong market presence and effective strategies, supporting long-term revenue expansion.

Menu Innovation

Successful menu innovation can drive customer engagement and increase sales, enhancing competitive advantage and market share.

International Market Strength

Strong performance in international markets reflects effective localization strategies and growth potential outside the U.S.

Negative Factors

High Debt Levels

High leverage can limit financial flexibility and increase risk, potentially impacting long-term financial health.

U.S. Market Challenges

Declining traffic among lower-income consumers suggests challenges in maintaining market share and revenue growth in the U.S.

Inflationary Pressures

Persistent inflation, especially in key inputs like beef, can pressure margins and affect profitability if not managed effectively.

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

Market Cap

$218.45B

Dividend Yield2.31%

Average Volume (3M)3.15M

Price to Earnings (P/E)26.4

Beta (1Y)0.25

Revenue Growth1.26%

EPS Growth2.87%

CountryUS

Employees150,000

SectorConsumer Cyclical

Sector Strength84

IndustryRestaurants

Share Statistics

EPS (TTM)3.22

Shares Outstanding712,154,360

10 Day Avg. Volume2,859,672

30 Day Avg. Volume3,148,284

Financial Highlights & Ratios

PEG Ratio-16.36

Price to Book (P/B)-54.85

Price to Sales (P/S)8.03

P/FCF Ratio31.21

Enterprise Value/Market Cap1.24

Enterprise Value/Revenue10.32

Enterprise Value/Gross Profit17.97

Enterprise Value/Ebitda18.81

Forecast

1Y Price Target

$339.94

Price Target Upside9.86% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering23

EPS Forecast (FY)N/A

Revenue Forecast (FY)N/A

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 multiple streams, primarily from the sale of food and beverages at its restaurants. The company's revenue model is structured around both company-operated and franchised locations. In franchised restaurants, McDonald's earns a significant portion of its revenue from franchise fees, which include an initial franchise fee and ongoing royalties based on a percentage of the franchisee's sales. Additionally, the company profits from the sale of food and supplies to these franchises. McDonald's also benefits from real estate transactions, as it often owns the land and buildings where its restaurants are located, generating rental income. Strategic partnerships, such as collaborations with beverage companies like Coca-Cola, and marketing initiatives also contribute to its earnings. Overall, McDonald's financial performance is bolstered by its strong brand presence, diversified menu offerings, and efficient operational model.

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 slowed significantly since its peak in 2021, reflecting a challenging U.S. market and inflationary pressures in Europe. Despite these challenges, the company is leveraging its loyalty program and technological advancements to drive growth, particularly in international markets. The latest earnings call highlights a strategic focus on expanding globally with plans for significant new restaurant openings, while the U.S. market remains under pressure from decreased consumer visits and economic constraints.

Data provided by:

The Fly

McDonald's Earnings Call Summary

Earnings Call Date:Nov 05, 2025

(Q3-2025)

% Change Since: |

Next Earnings Date:Feb 11, 2026

Earnings Call Sentiment Neutral

McDonald's showcased strong global sales growth and success with new innovations like the beverage test, alongside continued challenges with inflation and bifurcated consumer trends in the U.S. Despite pressures, the brand is effectively navigating the environment with strategic value offerings and maintaining strong performance in international markets. The sentiment of the call balances between positive achievements and ongoing challenges.

Q3-2025 Updates

Positive Updates

Global Comparable Sales Growth

McDonald's delivered global comparable sales growth of more than 3.5% in the third quarter, with growth across all segments.

System-Wide Sales Growth

For the second consecutive quarter, McDonald's delivered global system-wide sales growth of more than 6% in constant currency.

U.S. High-Income Consumer Traffic

QSR traffic growth among higher income consumers increased nearly double digits in the third quarter.

International Operations Success

Outside the U.S., large markets continued to execute disciplined value, menu, and marketing programs, leading to strong performance in places like Germany and Japan.

New Beverage Test Exceeds Expectations

Initial results from a beverage test in the U.S. are exceeding expectations with strong satisfaction scores and driving incremental occasions.

Dividend Increase

McDonald's announced a 5% increase in its dividend, marking the 49th consecutive year of dividend increases.

Negative Updates

Bifurcated U.S. Consumer Base

QSR traffic from lower income consumers declined nearly double digits in the third quarter, a trend persisting for nearly 2 years.

Challenges in China

Near-term performance in China continues to reflect macroeconomic pressures, although McDonald's remains confident in the long-term opportunity.

Pressure on Breakfast Daypart

Breakfast continues to be under pressure as a daypart industry-wide, with McDonald's holding share but facing challenges.

Inflationary Environment

Inflation is proving to be sticky, with expectations of above-average inflation next year, particularly high inflation around beef prices.

U.S. McOpCo Margin Contraction

The U.S. McOpCo margin contracted in the third quarter due to insufficient top line growth to offset inflationary pressures in wages and food costs.

Company Guidance

During McDonald's Third Quarter 2025 Investor Conference Call, the company provided several key metrics and insights into their performance and strategy. Global comparable sales grew by more than 3.5%, and system-wide sales increased by over 6% in constant currency, driven by new unit openings. In the U.S., McDonald's reported a 2.4% increase in comparable sales, despite a nearly double-digit decline in traffic from lower-income consumers, contrasted by double-digit growth in higher-income consumer traffic. The company emphasized their Accelerating the Arches strategy, focusing on menu innovation, marketing, and value offerings, including the relaunch of Extra Value Meals (EVMs) with $5 and $8 meal deals. Outside the U.S., internationally operated market segments saw a 4.3% rise in comparable sales, with strong performances in Germany and Australia. McDonald's also highlighted ongoing initiatives in high-growth categories, such as beverages and chicken, with tests of new beverage offerings in select U.S. locations showing promising initial results. Despite macroeconomic challenges, the company remains optimistic about their growth strategy and financial targets, planning to reach 50,000 restaurants globally by 2027.

McDonald's Financial Statement Overview

Summary

McDonald's shows strong profitability and cash generation with impressive revenue growth. However, the high debt-to-equity ratio and negative equity pose financial risks, impacting overall stability.

Income Statement

Very Positive

McDonald's demonstrates strong profitability with a consistent gross profit margin around 57% and a net profit margin exceeding 32% in TTM. The company shows impressive revenue growth of 78.3% in TTM, indicating robust expansion. EBIT and EBITDA margins are also healthy, reflecting efficient operations.

Balance Sheet

Neutral

The balance sheet reveals a high debt-to-equity ratio due to negative equity, which poses a financial risk. Despite this, McDonald's maintains a substantial asset base. The negative return on equity reflects the challenges of negative equity, impacting overall financial stability.

Cash Flow

Positive

McDonald's cash flow is strong, with a positive free cash flow growth rate of 6.9% in TTM. The operating cash flow to net income ratio is favorable, indicating efficient cash generation relative to earnings. However, the free cash flow to net income ratio suggests room for improvement in cash utilization.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	26.26B	25.92B	25.50B	23.18B	23.22B	19.21B
Gross Profit	15.08B	14.71B	14.56B	13.21B	12.58B	9.75B
EBITDA	14.41B	13.95B	13.86B	10.90B	12.18B	9.11B
Net Income	8.41B	8.22B	8.47B	6.18B	7.55B	4.73B
Balance Sheet
Total Assets	60.61B	55.18B	56.15B	50.44B	53.85B	52.63B
Cash, Cash Equivalents and Short-Term Investments	2.41B	1.08B	4.58B	2.58B	4.71B	3.45B
Total Debt	55.82B	51.95B	53.09B	48.70B	49.35B	51.46B
Total Liabilities	62.77B	58.98B	60.85B	56.44B	58.46B	60.45B
Stockholders Equity	-2.16B	-3.80B	-4.71B	-6.00B	-4.60B	-7.82B
Cash Flow
Free Cash Flow	7.37B	6.67B	7.25B	5.49B	7.10B	4.62B
Operating Cash Flow	10.48B	9.45B	9.61B	7.39B	9.14B	6.27B
Investing Cash Flow	-3.49B	-5.35B	-3.18B	-2.68B	-2.17B	-1.55B
Financing Cash Flow	-5.76B	-7.50B	-4.37B	-6.58B	-5.60B	-2.25B

McDonald's Technical Analysis

Technical Analysis Sentiment

Positive

Last Price309.44

Price Trends

50DMA

306.93

Positive

100DMA

305.43

Positive

200DMA

303.43

Positive

Market Momentum

MACD

-0.68

Positive

RSI

51.97

Neutral

STOCH

81.23

Negative

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 309.44 is below the 20-day moving average (MA) of 310.16, above the 50-day MA of 306.93, and above the 200-day MA of 303.43, indicating a neutral trend. The MACD of -0.68 indicates Positive momentum. The RSI at 51.97 is Neutral, neither overbought nor oversold. The STOCH value of 81.23 is Negative, 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

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CMG	73 Outperform	$53.34B	34.73	44.96%	―	7.31%	5.26%
DPZ	68 Neutral	$14.05B	24.01	―	1.63%	3.92%	4.98%
MCD	65 Neutral	$218.45B	26.39	―	2.31%	1.26%	2.87%
WEN	65 Neutral	$1.62B	8.84	100.85%	8.15%	-0.21%	0.16%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
YUM	59 Neutral	$43.57B	30.45	―	1.84%	11.60%	-4.33%
SBUX	56 Neutral	$102.29B	55.60	―	2.88%	2.80%	-50.71%

* Consumer Cyclical Sector Average

Performance Comparison

MCD

McDonald's

309.44

33.58

12.17%

CMG

Chipotle

39.41

-17.96

-31.31%

DPZ

Domino's Pizza

410.91

3.48

0.85%

SBUX

Starbucks

90.56

-0.11

-0.12%

WEN

Wendy's

8.34

-5.93

-41.55%

YUM

Yum! Brands

156.36

32.98

26.73%

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: Nov 06, 2025