A Fresh Look at McDonald's (MCD) Valuation Following Value Meal Comeback and Upbeat Earnings Buzz

Thinking about what to do with McDonald's stock right now? The company’s latest moves are grabbing the attention of both Wall Street and Main Street. With McDonald's doubling down on value by bringing back its Extra Value Meals and rolling out new promotions, investors are starting to sense a change in momentum. This comes as anticipation builds for the next earnings release. The buzz around better-than-expected profits and higher analyst earnings estimates is fueling optimism that these strategies are hitting the mark with budget-conscious consumers.

Looking at the stock price, McDonald's has delivered steady growth over the past year, climbing just over 5%. Recent weeks have seen a small dip, but the longer-term trajectory remains solid, helped by annual revenue and net income growth in the low to mid-single digits. In addition, the latest positive shifts in its U.S. business performance and international value campaigns show the market is weighing renewed momentum against lingering risks such as shifting consumer health trends and higher operating costs.

So, with the stock pulling back a bit and the company’s value focus kicking in, is this a potential buying window, or is the market already factoring future growth into the price?

Most Popular Narrative: 8.9% Undervalued

The most widely followed narrative suggests McDonald's stock is currently undervalued, trading nearly 9% below the consensus fair value as calculated by analysts using a blend of earnings, growth, and risk assumptions.

McDonald's aggressive international expansion, particularly the sustained strategy to open 2,200 stores globally in 2025 (with a strong pipeline for 2026 and beyond, and a focus on China and other emerging markets), positions the company to capture urbanization-driven growth and higher consumption from a rising middle class. This strategy is viewed as a potential driver for long-term double-digit revenue growth in international segments.

Curious how McDonald’s could deliver such an ambitious global growth story? The analyst narrative is built on a recipe of rising profits, growing sales, and expansion projections usually reserved for industry disruptors. Which single financial lever could make Wall Street’s price target reality? The real details may surprise you.

Result: Fair Value of $335.41 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent drops in low-income traffic or sustained inflation in core inputs could quickly reduce the bullish outlook that has been driving recent price targets.

Find out about the key risks to this McDonald's narrative.

Another View: Industry Benchmark Tells a Different Story

While analysts see McDonald’s trading below fair value, a look at its price-to-earnings ratio compared to the US Hospitality industry average shows a more expensive picture. Could the market be pricing in too much optimism?

See what the numbers say about this price — find out in our valuation breakdown.

Stay updated when valuation signals shift by adding McDonald's to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.

Build Your Own McDonald's Narrative

If you think the story looks different from your perspective or would rather follow your own instincts, you can easily build a personalized view in under three minutes. Do it your way.

A great starting point for your McDonald's research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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