We’ve recently updated our valuation analysis.

McDonald's Valuation

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

Valuation Score

1/6

Valuation Score 1/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

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

Other financial metrics that can be useful for relative valuation.

MCD key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue10.6x
Enterprise Value/EBITDA20.4x
PEG Ratio2.8x

Price to Earnings Ratio vs Peers

How does MCD's PE Ratio compare to its peers?

The above table shows the PE ratio for MCD vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average33.9x
SBUX Starbucks
34.8x12.4%US$114.3b
YUM Yum! Brands
27.8x8.1%US$35.6b
CMG Chipotle Mexican Grill
51.9x21.2%US$42.0b
QSR Restaurant Brands International
21.2x4.0%US$29.9b
MCD McDonald's
34.1x12.0%US$201.4b

Price-To-Earnings vs Peers: MCD is expensive based on its Price-To-Earnings Ratio (34.1x) compared to the peer average (33.9x).


Price to Earnings Ratio vs Industry

How does MCD's PE Ratio compare vs other companies in the US Hospitality Industry?

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a24.9%
n/an/an/a

Price-To-Earnings vs Industry: MCD is expensive based on its Price-To-Earnings Ratio (34.1x) compared to the US Hospitality industry average (18.5x)


Price to Earnings Ratio vs Fair Ratio

What is MCD'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.

MCD PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio34.1x
Fair PE Ratio40.9x

Price-To-Earnings vs Fair Ratio: MCD is good value based on its Price-To-Earnings Ratio (34.1x) compared to the estimated Fair Price-To-Earnings Ratio (40.9x).


Share Price vs Fair Value

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

Below Fair Value: MCD ($275) is trading above our estimate of fair value ($232.32)

Significantly Below Fair Value: MCD is trading above our estimate of fair value.


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 MCD forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUS$275.00
US$288.53
+4.9%
6.2%US$328.00US$247.00n/a34
Nov ’23US$272.95
US$287.59
+5.4%
6.2%US$328.00US$247.00n/a34
Oct ’23US$230.74
US$281.44
+22.0%
6.8%US$328.00US$235.00n/a34
Sep ’23US$256.47
US$282.63
+10.2%
6.6%US$328.00US$235.00n/a32
Aug ’23US$264.23
US$281.03
+6.4%
7.0%US$328.00US$235.00n/a31
Jul ’23US$252.96
US$278.03
+9.9%
6.4%US$314.00US$227.00n/a31
Jun ’23US$249.28
US$277.65
+11.4%
6.9%US$314.00US$227.00n/a31
May ’23US$249.16
US$280.19
+12.5%
5.9%US$314.00US$227.00n/a32
Apr ’23US$249.25
US$280.91
+12.7%
6.0%US$314.00US$250.00n/a32
Mar ’23US$239.63
US$283.64
+18.4%
5.6%US$314.00US$250.00n/a33
Feb ’23US$258.99
US$283.36
+9.4%
5.5%US$314.00US$250.00n/a33
Jan ’23US$268.07
US$275.18
+2.7%
6.3%US$314.00US$232.00n/a33
Dec ’22US$244.18
US$271.27
+11.1%
5.5%US$306.00US$232.00n/a32
Nov ’22US$250.58
US$270.99
+8.1%
5.4%US$306.00US$232.00US$272.9533
Oct ’22US$242.93
US$265.32
+9.2%
4.7%US$290.00US$232.00US$230.7433
Sep ’22US$238.15
US$265.39
+11.4%
5.3%US$295.00US$232.00US$256.4733
Aug ’22US$242.71
US$264.09
+8.8%
5.2%US$295.00US$232.00US$264.2333
Jul ’22US$232.27
US$256.25
+10.3%
4.9%US$283.00US$225.00US$252.9632
Jun ’22US$233.24
US$255.91
+9.7%
4.9%US$283.00US$225.00US$249.2832
May ’22US$236.08
US$254.44
+7.8%
5.0%US$275.00US$225.00US$249.1634
Apr ’22US$225.21
US$242.25
+7.6%
5.0%US$266.00US$209.00US$249.2532
Mar ’22US$208.25
US$240.77
+15.6%
4.9%US$266.00US$209.00US$239.6332
Feb ’22US$207.93
US$241.11
+16.0%
4.8%US$266.00US$209.00US$258.9933
Jan ’22US$214.58
US$240.76
+12.2%
5.2%US$266.00US$209.00US$268.0729
Dec ’21US$216.14
US$240.55
+11.3%
4.4%US$265.00US$215.00US$244.1829
Nov ’21US$213.00
US$235.90
+10.7%
6.8%US$265.00US$185.00US$250.5829

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


Discover undervalued companies