McDonald's Corporation

LSE:0R16 Stock Report

Market Cap: US$208.0b

McDonald's Valuation

Is 0R16 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of 0R16 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 0R16 ($295.25) is trading below our estimate of fair value ($327.34)

Significantly Below Fair Value: 0R16 is trading below fair value, but not by a significant amount.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 0R16?

Key metric: As 0R16 is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for 0R16. This is calculated by dividing 0R16's market cap by their current earnings.
What is 0R16's PE Ratio?
PE Ratio25.2x
EarningsUS$8.25b
Market CapUS$207.98b

Price to Earnings Ratio vs Peers

How does 0R16's PE Ratio compare to its peers?

The above table shows the PE ratio for 0R16 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average29.9x
CPG Compass Group
40.3x16.9%UK£44.9b
ROO Deliveroo
43.3x39.0%UK£2.2b
GRG Greggs
20.4x6.0%UK£2.8b
DOM Domino's Pizza Group
15.7x5.8%UK£1.2b
0R16 McDonald's
25.2x6.6%US$208.0b

Price-To-Earnings vs Peers: 0R16 is good value based on its Price-To-Earnings Ratio (25.2x) compared to the peer average (29.9x).

Price to Earnings Ratio vs Industry

How does 0R16's PE Ratio compare vs other companies in the GB Hospitality Industry?

1 CompanyPrice / EarningsEstimated GrowthMarket Cap
TAST Tasty
0.4x-75.9%US$2.36m
No more companies available in this PE range
0R16 25.2xIndustry Avg. 20.1xNo. of Companies5PE01224364860+
1 CompanyEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: 0R16 is expensive based on its Price-To-Earnings Ratio (25.2x) compared to the UK Hospitality industry average (19.5x).

Price to Earnings Ratio vs Fair Ratio

What is 0R16's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

0R16 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio25.2x
Fair PE Ratio39x

Price-To-Earnings vs Fair Ratio: 0R16 is good value based on its Price-To-Earnings Ratio (25.2x) compared to the estimated Fair Price-To-Earnings Ratio (39x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst 0R16 forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUS$295.25
US$321.51
+8.9%
6.6%US$360.00US$280.00n/a32
Dec ’25US$289.50
US$321.51
+11.1%
6.6%US$360.00US$280.00n/a32
Nov ’25US$294.75
US$321.04
+8.9%
6.6%US$360.00US$280.00n/a32
Oct ’25US$303.75
US$302.44
-0.4%
7.1%US$360.00US$257.00n/a32
Sep ’25US$276.00
US$295.85
+7.2%
6.4%US$342.00US$257.00n/a31
Aug ’25US$264.75
US$294.87
+11.4%
6.3%US$342.00US$257.00n/a31
Jul ’25US$251.00
US$310.13
+23.6%
5.7%US$357.00US$285.00n/a31
Jun ’25US$259.25
US$312.13
+20.4%
6.3%US$357.00US$285.00n/a30
May ’25US$271.75
US$316.05
+16.3%
6.2%US$357.00US$285.00n/a31
Apr ’25US$282.75
US$325.72
+15.2%
4.7%US$357.00US$290.00n/a31
Mar ’25US$291.50
US$326.26
+11.9%
4.5%US$357.00US$299.00n/a32
Feb ’25US$294.00
US$323.33
+10.0%
6.4%US$383.00US$280.00n/a33
Jan ’25US$295.50
US$315.59
+6.8%
6.3%US$383.00US$280.00n/a34
Dec ’24US$284.25
US$308.33
+8.5%
7.2%US$383.00US$270.00US$289.5033
Nov ’24US$260.25
US$307.72
+18.2%
7.4%US$383.00US$270.00US$294.7533
Oct ’24US$263.50
US$328.59
+24.7%
5.3%US$383.00US$285.00US$303.7532
Sep ’24US$280.00
US$327.97
+17.1%
5.1%US$383.00US$285.00US$276.0032
Aug ’24US$291.00
US$327.26
+12.5%
5.4%US$383.00US$285.00US$264.7533
Jul ’24US$297.00
US$316.05
+6.4%
5.0%US$346.00US$260.00US$251.0033
Jun ’24US$287.00
US$316.30
+10.2%
5.0%US$346.00US$260.00US$259.2532
May ’24US$293.00
US$314.20
+7.2%
5.4%US$346.00US$260.00US$271.7533
Apr ’24US$277.15
US$293.27
+5.8%
6.0%US$330.00US$240.00US$282.7532
Mar ’24US$262.70
US$292.20
+11.2%
5.8%US$328.00US$240.00US$291.5033
Feb ’24US$265.35
US$292.63
+10.3%
5.9%US$328.00US$240.00US$294.0032
Jan ’24US$266.05
US$289.55
+8.8%
6.3%US$328.00US$247.00US$295.5033
Dec ’23US$272.65
US$288.53
+5.8%
6.2%US$328.00US$247.00US$284.2534

Analyst Forecast: Target price is less than 20% higher than the current share price.

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Company Analysis and Financial Data Status

DataLast Updated (UTC time)
Company Analysis2024/12/20 04:52
End of Day Share Price 2024/12/20 00:00
Earnings2024/09/30
Annual Earnings2023/12/31

Data Sources

The data used in our company analysis is from S&P Global Market Intelligence LLC. The following data is used in our analysis model to generate this report. Data is normalised which can introduce a delay from the source being available.

PackageDataTimeframeExample US Source *
Company Financials10 years
  • Income statement
  • Cash flow statement
  • Balance sheet
Analyst Consensus Estimates+3 years
  • Forecast financials
  • Analyst price targets
Market Prices30 years
  • Stock prices
  • Dividends, Splits and Actions
Ownership10 years
  • Top shareholders
  • Insider trading
Management10 years
  • Leadership team
  • Board of directors
Key Developments10 years
  • Company announcements

* example for US securities, for non-US equivalent regulatory forms and sources are used.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.

Analysis Model and Snowflake

Details of the analysis model used to generate this report is available on our Github page, we also have guides on how to use our reports and tutorials on Youtube.

Learn about the world class team who designed and built the Simply Wall St analysis model.

Industry and Sector Metrics

Our industry and section metrics are calculated every 6 hours by Simply Wall St, details of our process are available on .

Analyst Sources

McDonald's Corporation is covered by 67 analysts. 31 of those analysts submitted the estimates of revenue or earnings used as inputs to our report. Analysts submissions are updated throughout the day.

AnalystInstitution
Jim MarroneAccountability Research Corporation
John StaszakArgus Research Company
David TarantinoBaird