McDonald's (MCD) AI Stock Analysis

• Market Cap: $223.32B
• Dividend Yield: 2.24%
• Average Volume (3M): 3.37M
• Price to Earnings (P/E): 26.8
• Beta (1Y): 0.31
• Revenue Growth: 1.17%
• EPS Growth: 2.09%
• Country: US
• Employees: 150,000
• Sector: Consumer Cyclical
• Sector Strength: 81
• Industry: Restaurants
• EPS (TTM): 3.19
• Shares Outstanding: 713,604,430
• 10 Day Avg. Volume: 3,199,359
• 30 Day Avg. Volume: 3,372,460
• 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: 1.18
• Enterprise Value/Revenue: 10.12
• Enterprise Value/Gross Profit: 17.75
• Enterprise Value/Ebitda: 18.50
• 1Y Price Target: $338.42
• Price Target Upside: 8.39% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 28

• Rating: 70 Outperform
• Price Target: $336.00 ▲(7.62% Upside)

McDonald's overall stock score reflects strong financial performance with high profitability and efficient cash management. The technical analysis indicates a stable upward trend, while valuation metrics suggest fair pricing. The earnings call reveals moderate growth with significant challenges in the U.S. market, balancing the positive developments internationally.

Positive Factors

Customer Traffic

An increased focus to regain core customer traffic is being observed, which could positively impact McDonald's performance.

International Markets

Trends in international markets like Europe and China are showing strong performance and market share gains for McDonald's.

Product Innovation

The introduction of new menu items and marketing strategies, such as the Snack Wraps and other regional launches, have driven traffic and sales.

Negative Factors

Consumer Spending

There is a continued double digit traffic weakness of the US lower income consumer, which poses a challenge for McDonald's.

Product Performance

The Chicken Strips did not perform well, with strong initial sales that quickly fell away amid poor media and customer reviews.

Sales Cannibalization

Poor economics and high sales cannibalization for new units are concerning themes across multiple markets.

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: Positive
• Last Price: 312.22
• 50DMA: Positive
• 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 Positive. The current price of 312.22 is above the 20-day moving average (MA) of 307.69, above the 50-day MA of 300.22, and above the 200-day MA of 299.92, indicating a bullish trend. The MACD of 3.40 indicates Negative momentum. The RSI at 59.20 is Neutral, neither overbought nor oversold. The STOCH value of 66.23 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MCD.

McDonald's Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DPZ	73 Outperform	$15.32B	26.20	-14.74%	1.44%	3.65%	5.71%
MCD	70 Outperform	$223.32B	26.85	-216.57%	2.24%	1.17%	2.09%
CMG	67 Neutral	$57.01B	37.59	42.59%	―	8.57%	10.72%
SBUX	66 Neutral	$98.47B	37.11	-47.07%	2.78%	0.60%	-35.19%
YUM	64 Neutral	$40.81B	29.04	-19.43%	1.90%	11.30%	-7.82%
WEN	62 Neutral	$1.96B	10.98	99.35%	8.51%	1.31%	-1.46%
Sector *	61 Neutral	$17.75B	12.56	-5.49%	3.02%	1.43%	-14.12%

McDonald's Corporate Events

McDonald’s Annual Shareholders’ Meeting Decisions Unveiled

On May 20, 2025, McDonald’s Corporation held its Annual Shareholders’ Meeting where key decisions were made regarding the company’s governance and strategic direction. The meeting included the election of 11 board members, approval of executive compensation, and ratification of Ernst & Young LLP as the independent auditor for 2025. Shareholder proposals on advertising risks, climate transition plans, and diversity in executive compensation were also considered, but did not receive majority support, indicating the company’s current strategic priorities and stakeholder interests.

The most recent analyst rating on (MCD) stock is a Buy with a $345.00 price target. To see the full list of analyst forecasts on McDonald’s stock, see the MCD Stock Forecast page.