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McDonald's
(NYSE:MCD)
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Rating:68Neutral
Price Target:
$299.00
▲(12.93% Upside)
Action:Reiterated
Date:08/08/26
The score is driven primarily by strong profitability and cash generation, tempered materially by balance-sheet risk (high debt and negative equity). Technicals point to a softer longer-term trend with only neutral momentum, while valuation is reasonable for a high-quality operator given the mid-20s P/E and supportive dividend yield. The latest earnings call was mixed: global drivers remain strong, but near-term performance depends on resolving U.S. execution and value/program cadence issues.
Positive Factors
Franchise & Real‑Estate Earnings
McDonald’s asset-light franchising plus ownership/master-leasing of real estate creates durable, recurring royalty and rent streams tied to system sales. That model scales with global unit growth, limits operating cost exposure, and provides predictable cash flow that supports dividends and reinvestment over multiple years.
Negative Factors
High Leverage & Negative Equity
Elevated debt and negative equity materially reduce financial flexibility and heighten interest‑rate and refinancing risk. Even with strong cash generation, heavy leverage constrains the ability to absorb shocks, fund opportunistic investments or increase shareholder returns without raising incremental funding or altering capital allocation over the next several quarters.
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Positive Factors
Negative Factors
Franchise & Real‑Estate Earnings
McDonald’s asset-light franchising plus ownership/master-leasing of real estate creates durable, recurring royalty and rent streams tied to system sales. That model scales with global unit growth, limits operating cost exposure, and provides predictable cash flow that supports dividends and reinvestment over multiple years.
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
$188.93B
Dividend Yield2.75%
Average Volume (3M)4.53M
Price to Earnings (P/E)21.7
Beta (1Y)0.32
Revenue Growth6.30%
EPS Growth5.37%
CountryUS
Employees150,000
SectorConsumer Cyclical
Sector Strength84
IndustryRestaurants
Share Statistics
EPS (TTM)12.34
Shares Outstanding707,641,540
10 Day Avg. Volume4,319,544
30 Day Avg. Volume4,526,241
Financial Highlights & Ratios
PEG Ratio5.30
Price to Book (P/B)-121.74
Price to Sales (P/S)8.11
P/FCF Ratio30.34
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$317.52Price Target Upside19.93% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering23
EPS Forecast (FY)12.93
Revenue Forecast (FY)$28.06B
McDonald's Business Overview & Revenue Model
Company Description
McDonald’s Corporation (MCD) is a global quick-service restaurant company that develops, operates, and franchises McDonald’s restaurants. The company’s core offering is fast food and beverages sold through company-operated and franchised locations...
How the Company Makes Money
McDonald’s makes money primarily through a franchising model alongside a smaller base of company-operated restaurants. Its key revenue streams include: (1) Franchise revenues: McDonald’s earns ongoing fees from franchised restaurants, generally in...
McDonald's Earnings Call Summary
Earnings Call Date:Aug 04, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 22, 2026
Earnings Call Sentiment Neutral
The call conveyed mixed but constructive momentum: core financials and global initiatives remain strong (system-wide sales growth, EPS growth, margins, loyalty scale, beverage early success, international performance and disciplined development), while the U.S. business showed clear execution, operations and marketing shortcomings that materially weighed on quarterly comparable sales. Management laid out concrete remediation steps (calendar simplification, reallocation of marketing, reinstating targeted digital offers, franchise discussions) and previewed a longer-term McDonald's > NEXT strategy, but near-term U.S. execution risk and select market weaknesses temper enthusiasm.Positive Updates
System-wide Sales and Comparable Sales Growth
System-wide sales grew 4% in constant currency in Q2 2026 (5% for the first half of 2026). Global comparable sales increased 1.3% in Q2 and 2.5% for the first half, with positive comps across each operating segment.
Negative Updates
U.S. Comparable Sales Underperformance and Execution Issues
U.S. comparable sales grew only 0.8% in Q2 (2.3% YTD). Management attributed the shortfall to inconsistent restaurant execution, overwhelmed crews from too many deployments, weaker service times and lower satisfaction scores; U.S. comps were slightly negative in July.
Read all updates
Q2-2026 Updates
Positive
Negative
System-wide Sales and Comparable Sales Growth
System-wide sales grew 4% in constant currency in Q2 2026 (5% for the first half of 2026). Global comparable sales increased 1.3% in Q2 and 2.5% for the first half, with positive comps across each operating segment.
Read all positive updates
Company Guidance
McDonald’s guidance highlighted a Q2 system‑wide sales increase of 4% in constant currency and global comparable sales up 1.3% (1H system‑wide +5% CC; 1H comps +2.5%), with U.S. comps +0.8% in Q2 (+2.3% 1H), IOM comps +1.5% and IDL comps +1.9%; Q2 adjusted EPS was $3.38 (≈+5% on a constant‑currency basis, including a $0.03 FX benefit) and management now assumes about a $0.15 full‑year 2026 FX tailwind to adjusted EPS (versus a prior $0.20–$0.30 range). They generated >$4 billion of Q2 restaurant margins, reported YTD adjusted operating margin of 46.9%, expect G&A to be ~2.2% of system‑wide sales for the year, plan to open ~2,600 gross restaurants in 2026, pushed the 50,000‑store target to 2028, and noted loyalty is nearly 220 million active users and delivery generates >$20 billion of annual system sales. Near‑term actions/guidance include launching national digital flash offers next week, reallocating 2H marketing to proven value offers (EVMs), simplifying restaurant deployments/eliminating non‑customer‑facing activities, continuing select company‑owned divestitures in 2026+, anticipating GBS benefits to begin lowering G&A % in 2027, and management estimates value execution issues drove roughly two‑thirds of the U.S. traffic shortfall.McDonald's Financial Statement Overview
Summary
Income Statement
92
Very Positive
Balance Sheet
38
Negative
Cash Flow
84
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 27.70B | 26.89B | 25.92B | 25.50B | 23.18B | 23.22B |
| Gross Profit | 15.90B | 15.44B | 14.71B | 14.56B | 13.21B | 12.58B |
| EBITDA | 14.47B | 14.64B | 13.95B | 13.86B | 10.90B | 12.18B |
| Net Income | 8.79B | 8.56B | 8.22B | 8.47B | 6.18B | 7.55B |
Balance Sheet | ||||||
| Total Assets | 59.92B | 59.52B | 55.18B | 56.15B | 50.44B | 53.85B |
| Cash, Cash Equivalents and Short-Term Investments | 822.00M | 774.00M | 1.08B | 4.58B | 2.58B | 4.71B |
| Total Debt | 54.59B | 54.81B | 51.95B | 53.09B | 48.70B | 49.35B |
| Total Liabilities | 60.94B | 61.31B | 58.98B | 60.85B | 56.44B | 58.46B |
| Stockholders Equity | -1.02B | -1.79B | -3.80B | -4.71B | -6.00B | -4.60B |
Cash Flow | ||||||
| Free Cash Flow | 7.76B | 7.19B | 6.67B | 7.25B | 5.49B | 7.10B |
| Operating Cash Flow | 11.35B | 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 | -8.64B | -7.13B | -7.50B | -4.37B | -6.58B | -5.60B |
McDonald's Technical Analysis
Negative
264.76
Price Trends
273.02
Negative
281.07
Negative
295.83
Negative
Market Momentum
-0.77
Positive
44.75
Neutral
11.46
Positive
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 264.76 is below the 20-day moving average (MA) of 270.44, below the 50-day MA of 273.02, and below the 200-day MA of 295.83, indicating a bearish trend. The MACD of -0.77 indicates Positive momentum. The RSI at 44.75 is Neutral, neither overbought nor oversold. The STOCH value of 11.46 is Positive, 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $39.53B | 18.22 | -30.35% | 1.96% | 10.28% | 56.85% | |
68 Neutral | $188.93B | 21.67 | -561.20% | 2.78% | 6.30% | 5.37% | |
68 Neutral | $34.80B | 18.80 | 34.86% | 3.50% | 6.51% | 40.57% | |
65 Neutral | $11.12B | 19.01 | -15.15% | 2.24% | 5.16% | 2.13% | |
62 Neutral | $42.21B | 31.79 | 53.26% | ― | 7.31% | -4.37% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
52 Neutral | $1.61B | 13.53 | 109.00% | 8.01% | -0.98% | -31.26% |
* Consumer Cyclical Sector Average
MCD
McDonald's
267.45
-38.21
-12.50%
CMG
Chipotle
34.66
-8.41
-19.53%
DPZ
Domino's Pizza
336.52
-97.96
-22.55%
WEN
Wendy's
8.93
-0.68
-7.04%
YUM
Yum! Brands
145.93
-0.59
-0.40%
QSR
Restaurant Brands International
77.10
15.63
25.42%
McDonald's Corporate Events
Business Operations and StrategyExecutive/Board Changes
McDonald’s Names Skye Anderson President of U.S. Operations
Positive
Aug 4, 2026
On August 3, 2026, long-serving executive Joe Erlinger notified McDonald’s that he would step down as Executive Vice President and President of McDonald’s USA, effective August 4, 2026. Erlinger, who led the U.S. business for nearly se...
Executive/Board ChangesShareholder Meetings
McDonald’s Shareholders Back Board, Pay and Auditor Choices
Positive
May 22, 2026
At its 2026 Annual Shareholders’ Meeting held on May 20, 2026, McDonald’s shareholders elected 12 nominees to the Board of Directors, all receiving strong majority support despite some variation in opposition levels among individual di...
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.