The McDonald's Corporation (NYSE:MCD) First-Quarter Results Are Out And Analysts Have Published New Forecasts

McDonald's Corporation (NYSE:MCD) just released its latest first-quarter report and things are not looking great. McDonald's missed analyst forecasts, with revenues of US$6.0b and statutory earnings per share (EPS) of US$2.60, falling short by 2.8% and 3.6% respectively. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

We've discovered 2 warning signs about McDonald's. View them for free.

Taking into account the latest results, the consensus forecast from McDonald's' 30 analysts is for revenues of US$26.5b in 2025. This reflects a satisfactory 3.1% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to accumulate 7.5% to US$12.27. In the lead-up to this report, the analysts had been modelling revenues of US$26.6b and earnings per share (EPS) of US$12.31 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

Check out our latest analysis for McDonald's

It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$331. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values McDonald's at US$364 per share, while the most bearish prices it at US$300. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting McDonald's is an easy business to forecast or the the analysts are all using similar assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the McDonald's' past performance and to peers in the same industry. We would highlight that McDonald's' revenue growth is expected to slow, with the forecast 4.1% annualised growth rate until the end of 2025 being well below the historical 6.1% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 10.0% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than McDonald's.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that McDonald's' revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for McDonald's going out to 2027, and you can see them free on our platform here..

Even so, be aware that McDonald's is showing 2 warning signs in our investment analysis , and 1 of those makes us a bit uncomfortable...

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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.