Complete MCD Stock Valuation Analysis
Comprehensive intrinsic value analysis using 6 different methodologies
MCD DCF Analysis
MCD (McDonald's Corporation) discounted cash flow analysis with multiple scenarios, growth assumptions, and terminal value calculations
Financial Projections
| Metrics | 2022 (Historical) | 2023 (Historical) | 2024 (Historical) | 2025 (Projected) | 2026 (Projected) | 2027 (Projected) | 2028 (Projected) | 2029 (Projected) |
|---|---|---|---|---|---|---|---|---|
| Revenue | $23.2B | $25.5B | $25.9B | $27.4B | $28.8B | $30.1B | $31.4B | $32.6B |
| Revenue Growth % | - | 10.0% | 1.7% | 5.7% | 5.1% | 4.6% | 4.2% | 3.7% |
| EBIT | $9.4B | $11.6B | $11.7B | $11.0B | $11.5B | $12.1B | $12.6B | $13.0B |
| EBIT Margin % | 40.4% | 45.7% | 45.2% | 40.0% | 40.0% | 40.0% | 40.0% | 40.0% |
| Tax Rate % | 21.1% | 19.5% | 20.5% | 20.3% | 20.7% | 21.2% | 21.7% | 22.2% |
| NOPAT | $7.4B | $9.4B | $9.3B | $8.7B | $9.1B | $9.5B | $9.8B | $10.1B |
| NOPAT Margin % | 31.9% | 36.8% | 35.9% | 31.9% | 31.7% | 31.5% | 31.3% | 31.1% |
| Capex | $1.9B | $2.4B | $2.8B | $2.5B | $2.5B | $2.5B | $2.4B | $2.4B |
| Capex / Revenue % | 8.2% | 9.2% | 10.7% | 9.1% | 8.6% | 8.2% | 7.8% | 7.4% |
| Depreciation | $1.9B | $2.0B | $2.1B | $2.2B | $2.3B | $2.4B | $2.5B | $2.6B |
| D&A / Revenue % | 8.1% | 7.8% | 8.1% | 8.0% | 8.0% | 8.0% | 8.0% | 8.0% |
| Change in NWC | $-1.5B | $-495.1M | $-389.0M | $-681.0M | $-572.8M | $-479.5M | $-399.5M | $-331.6M |
| NWC Change / Revenue % | -6.5% | -1.9% | -1.5% | -2.5% | -2.0% | -1.6% | -1.3% | -1.0% |
| Unlevered FCF | $8.9B | $9.5B | $9.0B | $9.1B | $9.5B | $9.9B | $10.3B | $10.7B |
| UFCF % Chg. | - | 6.9% | -4.9% | 1.0% | 4.4% | 4.1% | 3.9% | 3.6% |
| FCF / Revenue % | 38.3% | 37.2% | 34.8% | 33.3% | 33.0% | 32.9% | 32.8% | 32.7% |
| Discount Factor | - | - | - | 0.940 | 0.883 | 0.829 | 0.779 | 0.732 |
| Present Value of FCF | - | - | - | $8.6B | $8.4B | $8.2B | $8.0B | $7.8B |
| Sum of PV of UFCF | - | - | - | $8.6B | $17.0B | $25.2B | $33.2B | $41.0B |
WACC Calculation
Weighted Average Cost of Capital used for discounting cash flows.
| WACC Calculation | Value |
|---|---|
| Cost of Debt | 5.5% |
| Tax Rate | 20.3% |
| After Tax Cost of Debt | 4.4% |
| Risk Free Rate | 4.46% |
| Market Risk Premium | 4.3% |
| Beta | 0.57 |
| Cost of Equity | 6.9% |
| Total Debt | $51.9B |
| Market Cap | $224.0B |
| Total Capital | $276.0B |
| Debt Weighting | 18.8% |
| Equity Weighting | 81.2% |
| WACC | 6.4% |
Terminal Value
Choose between perpetuity growth or exit multiple methods.
| Terminal Value Calculation | Value |
|---|---|
| Terminal Growth Rate | 2.5% |
| Final Year FCF | $10.7B |
| Terminal Value | $277.8B |
| PV of Terminal Value | $203.4B |
| Cumulative PV of UFCF | $41.0B |
| Net Debt | $50.9B |
| Equity Value | $193.5B |
| Shares Outstanding | 721.9M |
| Implied Share Price | $268 |
| Current Share Price | $313 |
| Implied Upside/(Downside) | -14.4% |
Valuation Summary
$268.09
Implied Price
$313.29
Current Price
-14.4%
Upside/Downside
6.4%
WACC
MCD Dividend Discount Model
MCD dividend discount model based on historical dividend payments and projected dividend growth rates
DDM Method Selection
Model Assumptions
Historical 5Y CAGR: 0.4%
Cost of equity (risk-free rate + equity risk premium)
Valuation Result
$80.82
Intrinsic Value
$0.00
Current Price
+Infinity%
Upside/Downside
Medium Confidence
Dividend History & Growth Analysis
| Period | Dividend per Share | YoY Growth | Growth Rate | Period Type |
|---|---|---|---|---|
2025Q2 2024 - Q2 2025 | $5.21Current | $1.32 | -20.2% | TTM |
2024Q2 2023 - Q2 2024 | $6.53 | $0.59 | +9.9% | TTM Historical |
2023Q2 2022 - Q2 2023 | $5.94 | $0.51 | +9.4% | TTM Historical |
2022Q2 2021 - Q2 2022 | $5.43 | $0.31 | +6.1% | TTM Historical |
2021Q2 2020 - Q2 2021 | $5.12 | — | — | TTM Historical |
TTM Analysis
Average Growth Rate: +1.3%
TTM Methodology
This analysis uses Trailing Twelve Months (TTM) windows for consistent 12-month comparisons. Each period represents dividends paid over a rolling 12-month window ending on the same calendar date, eliminating partial fiscal year distortions and providing accurate growth rate calculations.
Calculation Breakdown
Formula:
Intrinsic Value = D₁ / (r - g)
Substitution:
= $5.23 / (6.9% - 0.4%)
Result:
$80.82
MCD Peer Valuation Analysis
Relative valuation based on comparable company trading multiples
Peer Valuation Analysis
Fair Value Range Analysis
Based on median multiples from 10 peer companies in Consumer Cyclical
P/E Ratio
$341.83
+9.1%
Peer Median: 30.1x
EV/EBITDA
$370.58
+18.3%
Peer Median: 19.1x
P/S Ratio
$186.24
-40.6%
Peer Median: 5.2x
Interpretation: Each multiple provides a different perspective on fair value. Consider which multiple is most relevant for MCD's business model and current situation.
Multiple Comparison
| Multiple | MCD Current | Peer Median | Peer Average | Premium/Discount | Assessment |
|---|---|---|---|---|---|
| P/E Ratio | 27.6x | 30.1x | 30.4x | -8.4% | Fair Value |
| EV/EBITDA | 19.8x | 19.1x | 19.6x | 3.7% | Fair Value |
| P/S Ratio | 8.7x | 5.2x | 4.8x | 68.2% | Overvalued |
Peer Companies
Click any company to view their valuation
| Company | Market Cap | P/E Ratio | EV/EBITDA | P/S Ratio |
|---|---|---|---|---|
| $224.01B | 27.6x | 19.8x | 8.7x | |
| $98.39B | 31.5x | 19.1x | 2.7x | |
| $90.60B | 274.7x | 109.9x | 8.1x | |
| $67.60B | 43.7x | 30.1x | 5.9x | |
| $40.08B | 28.5x | 17.6x | 5.2x | |
| $25.40B | 24.3x | 16.4x | 2.2x | |
| $15.93B | 26.5x | 22.0x | 3.4x | |
| $12.98B | 30.1x | 19.1x | 2.4x | |
| $11.70B | 198.4x | 61.0x | 8.6x | |
| $10.59B | 31.1x | 12.4x | 0.6x |
MCD Graham Intrinsic Value
Growth-adjusted intrinsic value with two formula variants
Formula Selection
V = EPS × (8.5 + 2g)
Graham's original P/E shortcut for growth, no interest-rate adjustment
V = [EPS × (8.5 + 2g) × 4.4] / Y
Graham's 1974 refinement: adds rate-environment sensitivity
Active Formula: Base-Growth
11.36 × (8.5 + 2 × 4.2%)
Input Data & Growth Assumptions
Current EPS (TTM)$11.36
Latest 10-K • 2024-12-31T00:00:00
Historical 3Y4.2%
Financial statements
Historical 5Y7.6%
Financial statements
Custom
%
Enter a positive growth rate estimate (0-50%)
Graham Intrinsic Value Result
$192.86
Intrinsic Value
$313.29
Current Price
-38.4%
Upside/Downside
Base Formula
Growth: 4.2%
MCD Peter Lynch Fair Value
Growth-based valuation using PEG ratio analysis for growth stocks
Fair Value Calculation
EPS (TTM)$11.36
Latest 10-K • 2024-12-31T00:00:00
Historical 3Y4.2%
3-year earnings growth
Historical 5Y7.6%
5-year earnings growth
4.2%
1%50%
Fair Value Formula: EPS × Growth Rate
$11.36 × 4.2% = $48.14
$48.14
Fair Value
$313.29
Current Price
-84.6%
Upside/Downside
PEG Analysis
27.6x
Current P/E
4.2%
Growth Rate
6.51
PEG Ratio (P/E ÷ Growth Rate)
Significantly Overvalued
PEG Ratio Interpretation:
• PEG < 1.0: Undervalued (growth exceeds P/E)
• PEG = 1.0: Fairly valued (ideal Lynch ratio)
• PEG > 1.5: Overvalued (paying premium for growth)
Peter Lynch's Rule:
"The P/E ratio of any company that's fairly priced will equal its growth rate." A stock with 15% growth should trade at a P/E of 15 (PEG = 1.0).
MCD Earnings Power Value (EPV)
Normalized earnings-based valuation for sustainable earning power assessment
Earnings Normalization
| Earnings Component | Amount ($B) | Description |
|---|---|---|
| Reported Earnings | 8.2 | Base earnings from financial statements |
| Normalized Earnings | 8.2 | Final normalized earning power |
One-time Items: Remove non-recurring gains/losses
Cyclical Adjustment: Normalize for economic cycle position
EPV Result
$139.72
EPV per Share
$313.29
Current Price
-55.4%
Upside/Downside
8.2%
WACC: 8.2% (calculated from market data)
Confidence: High
Normalized earnings approach
EPV Calculation Breakdown
Enterprise Value Calculation
| Normalized Earnings | $8.2B |
| Cost of Capital | 8.2% |
| Enterprise Value | $100.9B |
Per Share Value
| Enterprise Value | $100.9B |
| Shares Outstanding | 0.7B |
| EPV per Share | $139.72 |
WACC Components
| Cost of Equity | 9.2% |
| After-Tax Cost of Debt | 3.5% |
| Equity Weight | 81.3% |
| Debt Weight | 18.7% |
| WACC | 8.2% |