McDonald's Valuation

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

Valuation Score

2/6

Valuation Score 2/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • PM vs Fair Ratio

  • Analyst Forecast

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 ($295.19) is trading above our estimate of fair value ($274.6)

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


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/Revenue10.3x
Enterprise Value/EBITDA19.2x
PEG Ratio3.8x

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.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average32.2x
SBUX Starbucks
24.5x11.2%US$106.6b
CMG Chipotle Mexican Grill
59.6x15.9%US$72.5b
YUM Yum! Brands
24.4x7.1%US$38.6b
QSR Restaurant Brands International
20.1x11.3%US$33.7b
MCD McDonald's
25.2x6.8%US$212.1b

Price-To-Earnings vs Peers: MCD is good value based on its Price-To-Earnings Ratio (25.2x) compared to the peer average (32.2x).


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/a19.9%
n/an/an/a
No. of CompaniesPE048121620

Fetching data

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a19.9%
n/an/an/a
No more companies

Price-To-Earnings vs Industry: MCD is expensive based on its Price-To-Earnings Ratio (25.2x) compared to the US Hospitality industry average (20.1x).


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 Ratio25x
Fair PE Ratio32.7x

PM vs Fair Ratio: MCD is good value based on its Price-To-Earnings Ratio (25.2x) compared to the estimated Fair Price-To-Earnings Ratio (32.7x).


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$295.19
US$326.26
+10.5%
4.5%US$357.00US$299.00n/a32
Feb ’25US$298.08
US$323.33
+8.5%
6.4%US$383.00US$280.00n/a33
Jan ’25US$296.51
US$315.59
+6.4%
6.3%US$383.00US$280.00n/a34
Dec ’24US$285.96
US$308.33
+7.8%
7.2%US$383.00US$270.00n/a33
Nov ’24US$261.97
US$307.72
+17.5%
7.4%US$383.00US$270.00n/a33
Oct ’24US$263.44
US$328.59
+24.7%
5.3%US$383.00US$285.00n/a32
Sep ’24US$280.94
US$327.97
+16.7%
5.1%US$383.00US$285.00n/a32
Aug ’24US$291.07
US$327.26
+12.4%
5.4%US$383.00US$285.00n/a33
Jul ’24US$298.41
US$316.05
+5.9%
5.0%US$346.00US$260.00n/a33
Jun ’24US$287.87
US$316.30
+9.9%
5.0%US$346.00US$260.00n/a32
May ’24US$297.58
US$314.20
+5.6%
5.4%US$346.00US$260.00n/a33
Apr ’24US$279.61
US$293.27
+4.9%
6.0%US$330.00US$240.00n/a32
Mar ’24US$262.72
US$292.20
+11.2%
5.8%US$328.00US$240.00n/a33
Feb ’24US$266.27
US$292.63
+9.9%
5.9%US$328.00US$240.00US$298.0832
Jan ’24US$263.53
US$289.55
+9.9%
6.3%US$328.00US$247.00US$296.5133
Dec ’23US$273.40
US$288.53
+5.5%
6.2%US$328.00US$247.00US$285.9634
Nov ’23US$272.95
US$287.59
+5.4%
6.2%US$328.00US$247.00US$261.9734
Oct ’23US$230.74
US$281.44
+22.0%
6.8%US$328.00US$235.00US$263.4434
Sep ’23US$256.47
US$282.63
+10.2%
6.6%US$328.00US$235.00US$280.9432
Aug ’23US$264.23
US$281.03
+6.4%
7.0%US$328.00US$235.00US$291.0731
Jul ’23US$252.96
US$278.03
+9.9%
6.4%US$314.00US$227.00US$298.4131
Jun ’23US$249.28
US$277.65
+11.4%
6.9%US$314.00US$227.00US$287.8731
May ’23US$249.16
US$280.19
+12.5%
5.9%US$314.00US$227.00US$297.5832
Apr ’23US$249.25
US$280.91
+12.7%
6.0%US$314.00US$250.00US$279.6132
Mar ’23US$239.63
US$283.64
+18.4%
5.6%US$314.00US$250.00US$262.7233
Feb ’23US$258.99
US$283.36
+9.4%
5.5%US$314.00US$250.00US$266.2733

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


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