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McDonald's
(NYSE:MCD)
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Rating:68Neutral
Price Target:
$273.00
▲(1.83% Upside)
Action:Reiterated
Date:09/23/26
The score is primarily supported by outstanding profitability and strong cash generation, but held back by an aggressive, debt-heavy balance sheet. Technical signals are also weak with the stock below key moving averages and negative momentum, while valuation and dividend are supportive. The latest earnings commentary and recent strategy update are constructive, but near-term U.S. execution remains the key risk.
Positive Factors
Strong profitability and steady revenue growth
McDonald’s combines steady revenue expansion with exceptionally high gross, operating and net margins. This indicates a resilient, efficient business model with pricing power and strong earnings conversion, providing a durable base for reinvestment, franchise support and continued growth over the next several quarters.
Negative Factors
Highly leveraged balance sheet with negative equity
McDonald’s debt-heavy capital structure leaves a limited equity cushion and reduces financial flexibility. High leverage can constrain the company’s ability to absorb operating setbacks, increase exposure to financing costs and limit room for additional investment or shareholder returns if cash generation weakens.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong profitability and steady revenue growth
McDonald’s combines steady revenue expansion with exceptionally high gross, operating and net margins. This indicates a resilient, efficient business model with pricing power and strong earnings conversion, providing a durable base for reinvestment, franchise support and continued growth over the next several quarters.
Read all positive factors
McDonald's Key Performance Indicators (KPIs)
Any
Comparable Sales Growth
Measures the increase or decrease in sales at existing locations, providing insight into the company's ability to grow sales without expanding its footprint. It reflects customer demand and operational efficiency.
Measures the increase or decrease in sales at existing locations, providing insight into the company's ability to grow sales without expanding its footprint. It reflects customer demand and operational efficiency.
Data provided by:
The Fly
The FlyMcDonald's (MCD) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$171.94B
Dividend Yield3.06%
Average Volume (3M)5.98M
Price to Earnings (P/E)19.7
Beta (1Y)0.29
Revenue Growth6.30%
EPS Growth5.37%
CountryUS
Employees150,000
SectorConsumer Cyclical
Sector Strength84
IndustryRestaurants
Share Statistics
EPS (TTM)12.35
Shares Outstanding707,641,540
10 Day Avg. Volume6,122,385
30 Day Avg. Volume5,975,327
Financial Highlights & Ratios
PEG Ratio5.30
Price to Book (P/B)-121.74
Price to Sales (P/S)8.11
P/FCF Ratio30.34
Enterprise Value/Market Cap1.43
Enterprise Value/Revenue8.88
Enterprise Value/Gross Profit15.47
Enterprise Value/Ebitda16.32
Forecast
1Y Price Target
$287.87Price Target Upside7.37% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering25
EPS Forecast (FY)12.88
Revenue Forecast (FY)$28.16B
McDonald's Business Overview & Revenue Model
Company Description
McDonald's Corporation operates and licenses its renowned fast-food chain worldwide, with a significant presence in both the United States and international markets. Their comprehensive menu offers classic items like hamburgers and cheeseburgers, ...
How the Company Makes Money
McDonald’s makes money primarily through a franchising model alongside a smaller base of company-operated restaurants. Its key revenue streams include: (1) Franchise revenues: McDonald’s earns ongoing fees from franchised restaurants, generally in...
McDonald's Earnings Call Summary
Earnings Call Date:Aug 04, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 04, 2026
Earnings Call Sentiment Neutral
The call conveyed mixed but constructive momentum: core financials and global initiatives remain strong (system-wide sales growth, EPS growth, margins, loyalty scale, beverage early success, international performance and disciplined development), while the U.S. business showed clear execution, operations and marketing shortcomings that materially weighed on quarterly comparable sales. Management laid out concrete remediation steps (calendar simplification, reallocation of marketing, reinstating targeted digital offers, franchise discussions) and previewed a longer-term McDonald's > NEXT strategy, but near-term U.S. execution risk and select market weaknesses temper enthusiasm.Positive Updates
System-wide Sales and Comparable Sales Growth
System-wide sales grew 4% in constant currency in Q2 2026 (5% for the first half of 2026). Global comparable sales increased 1.3% in Q2 and 2.5% for the first half, with positive comps across each operating segment.
Negative Updates
U.S. Comparable Sales Underperformance and Execution Issues
U.S. comparable sales grew only 0.8% in Q2 (2.3% YTD). Management attributed the shortfall to inconsistent restaurant execution, overwhelmed crews from too many deployments, weaker service times and lower satisfaction scores; U.S. comps were slightly negative in July.
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Q2-2026 Updates
Positive
Negative
System-wide Sales and Comparable Sales Growth
System-wide sales grew 4% in constant currency in Q2 2026 (5% for the first half of 2026). Global comparable sales increased 1.3% in Q2 and 2.5% for the first half, with positive comps across each operating segment.
Read all positive updates
Company Guidance
McDonald’s guidance highlighted a Q2 system‑wide sales increase of 4% in constant currency and global comparable sales up 1.3% (1H system‑wide +5% CC; 1H comps +2.5%), with U.S. comps +0.8% in Q2 (+2.3% 1H), IOM comps +1.5% and IDL comps +1.9%; Q2 adjusted EPS was $3.38 (≈+5% on a constant‑currency basis, including a $0.03 FX benefit) and management now assumes about a $0.15 full‑year 2026 FX tailwind to adjusted EPS (versus a prior $0.20–$0.30 range). They generated >$4 billion of Q2 restaurant margins, reported YTD adjusted operating margin of 46.9%, expect G&A to be ~2.2% of system‑wide sales for the year, plan to open ~2,600 gross restaurants in 2026, pushed the 50,000‑store target to 2028, and noted loyalty is nearly 220 million active users and delivery generates >$20 billion of annual system sales. Near‑term actions/guidance include launching national digital flash offers next week, reallocating 2H marketing to proven value offers (EVMs), simplifying restaurant deployments/eliminating non‑customer‑facing activities, continuing select company‑owned divestitures in 2026+, anticipating GBS benefits to begin lowering G&A % in 2027, and management estimates value execution issues drove roughly two‑thirds of the U.S. traffic shortfall.McDonald's Financial Statement Overview
Summary
Income Statement
92
Very Positive
Balance Sheet
38
Negative
Cash Flow
84
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 27.70B | 26.89B | 25.92B | 25.49B | 23.18B | 23.22B |
| Gross Profit | 15.90B | 15.44B | 14.71B | 14.56B | 13.21B | 12.58B |
| EBITDA | 15.07B | 14.68B | 13.95B | 13.86B | 10.90B | 12.18B |
| Net Income | 8.79B | 8.56B | 8.22B | 8.47B | 6.18B | 7.55B |
Balance Sheet | ||||||
| Total Assets | 59.92B | 59.52B | 55.18B | 56.15B | 50.44B | 53.85B |
| Cash, Cash Equivalents and Short-Term Investments | 822.00M | 774.00M | 1.08B | 4.58B | 2.58B | 4.71B |
| Total Debt | 54.59B | 54.81B | 51.95B | 53.09B | 48.70B | 49.35B |
| Total Liabilities | 60.94B | 61.31B | 58.98B | 60.85B | 56.44B | 58.46B |
| Stockholders Equity | -1.02B | -1.79B | -3.80B | -4.71B | -6.00B | -4.60B |
Cash Flow | ||||||
| Free Cash Flow | 7.76B | 7.19B | 6.67B | 7.25B | 5.49B | 7.10B |
| Operating Cash Flow | 11.35B | 10.55B | 9.45B | 9.61B | 7.39B | 9.14B |
| Investing Cash Flow | -3.83B | -3.82B | -5.35B | -3.18B | -2.68B | -2.17B |
| Financing Cash Flow | -8.64B | -7.13B | -7.50B | -4.37B | -6.58B | -5.60B |
McDonald's Technical Analysis
Negative
268.10
Price Trends
251.82
Negative
261.89
Negative
282.79
Negative
Market Momentum
-3.33
Negative
52.31
Neutral
87.81
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MCD, the sentiment is Negative. The current price of 268.1 is above the 20-day moving average (MA) of 236.80, above the 50-day MA of 251.82, and below the 200-day MA of 282.79, indicating a neutral trend. The MACD of -3.33 indicates Negative momentum. The RSI at 52.31 is Neutral, neither overbought nor oversold. The STOCH value of 87.81 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MCD.
McDonald's Risk Analysis
McDonald's disclosed 33 risk factors in its most recent earnings report. McDonald's reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
McDonald's Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $37.82B | 27.41 | 53.26% | ― | 7.31% | -4.37% | |
68 Neutral | $171.94B | 19.67 | -561.20% | 3.06% | 6.30% | 5.37% | |
68 Neutral | $41.07B | 18.79 | -30.35% | 1.97% | 10.28% | 56.85% | |
68 Neutral | $34.00B | 18.25 | 34.86% | 3.44% | 6.51% | 40.57% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
52 Neutral | $111.17B | 56.05 | -24.31% | 2.54% | 4.51% | -24.97% | |
52 Neutral | $1.28B | 10.15 | 109.00% | 7.31% | -0.98% | -31.26% |
* Consumer Cyclical Sector Average
MCD
McDonald's
242.97
-57.08
-19.02%
CMG
Chipotle
29.89
-11.74
-28.20%
SBUX
Starbucks
97.52
15.09
18.31%
WEN
Wendy's
6.70
-1.69
-20.17%
YUM
Yum! Brands
150.51
5.17
3.56%
QSR
Restaurant Brands International
74.81
9.42
14.41%
McDonald's Corporate Events
Business Operations and StrategyFinancial Disclosures
McDonald’s Launches NEXT Strategy to Drive Growth
Positive
Sep 23, 2026
On September 23, 2026, McDonald’s unveiled its McDonald’s > NEXT strategy, setting new growth and productivity targets aimed at becoming the first choice for more customers, more often. The plan targets 1.5 percentage points of mark...
Business Operations and StrategyExecutive/Board Changes
McDonald’s Names Skye Anderson President of U.S. Operations
Positive
Aug 4, 2026
On August 3, 2026, long-serving executive Joe Erlinger notified McDonald’s that he would step down as Executive Vice President and President of McDonald’s USA, effective August 4, 2026. Erlinger, who led the U.S. business for nearly se...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.