McDonald’s (MCD) Valuation: A Neutral Look After Recent Flat Share Performance

McDonald's (MCD) shares edged up slightly today, closing at $304.16. The stock's steady movement comes after a generally flat few weeks. This invites a closer look at how recent business trends may affect investor confidence in the coming months.

See our latest analysis for McDonald's.

Over the past year, McDonald's has quietly delivered a 7.9% total shareholder return, reflecting steady growth even as its recent share price movement has been muted. That combination of modest near-term price shifts and longer-term resilience suggests momentum is holding up for now, especially as the company continues to adapt its strategy in a competitive quick-service market.

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With shares hovering just under analyst price targets but steady growth in profits and sales, the question becomes clear: is McDonald’s undervalued for its long-term prospects, or has the market already priced in future gains?

Most Popular Narrative: 8.1% Undervalued

Compared to its last closing price of $304.16, the most widely followed narrative sets McDonald's fair value at $330.87. That signals room for upside based on the latest consensus view, with recent brand and digital investments setting the stage for earnings acceleration.

Robust investment and traction in digital commerce, including loyalty program expansion, app-based ordering, geofencing-enabled pickup, and a targeted goal of 250 million active loyalty users by 2027, are expected to increase customer frequency, improve retention, and lift average ticket size. These factors support both revenue and higher net margins over time.

Read the complete narrative.

Curious about the bold projections fueling that fair value? The narrative hints at a future powered by margin expansion, outsized digital growth, and expectations usually reserved for disruptive tech, not fast food. What key numbers are baked into those forecasts? Take a closer look to see which bullish financial formulas are at the heart of this valuation.

Result: Fair Value of $330.87 (UNDERVALUED)

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

However, ongoing declines in low-income customer visits and continued inflation in core inputs could sharply limit the bullish outlook for McDonald’s in the future.

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

Another View: SWS DCF Model Offers a Different Take

While analyst consensus sees McDonald’s as undervalued for now, our DCF model offers a contrasting view. According to the SWS DCF model, McDonald's intrinsic value is $262.84. This suggests shares are currently priced above what fundamentals alone might justify. Is the market overlooking real risks, or rewarding future potential?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out McDonald's for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 921 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own McDonald's Narrative

If you think the story looks different from your perspective, or want to put the numbers to the test for yourself, you can craft your own in just a few minutes. Do it your way

A great starting point for your McDonald's research is our analysis highlighting 3 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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