McDonald's Corporation(MCD) - Stock detail

McDonald's Corporation

US
MCD
McDonald's Corporation(Listing date: 04/21/1965)

McDonald's Corporation is a company registered in Delaware. The company franchises and operates McDonald's restaurants, which offer locally relevant menus of quality food and beverages in communities across more than 100 countries. The company is primarily a franchisor and believes that franchising is crucial for delivering great-tasting food, locally relevant customer experiences, and driving profitability. Franchising enables individuals to become their own employers and maintain control over all employment-related matters, marketing, and pricing decisions, while also benefiting from the strength of McDonald's global brand, operating system, and financial resources. The company's revenues include sales from company-operated restaurants as well as fees from franchised restaurants operated by traditional franchisees, developmental licensees, and affiliates.

AI Value AnalystHold
Overall Rating5.7/10
Generated at:2026-04-17 17:42:44
Analysis based on real data for McDonald's Corporation (MCD). Financial analysis utilizes data from 5 consecutive quarterly reports ending on the following dates: 2025-12-31, 2025-09-30, 2025-06-30, 2025-03-31, and 2024-12-31. The market price and 60-day range data are as of the report generation date, April 17, 2026.
Overview

McDonald's Corporation (MCD) is a global leader in the quick-service restaurant industry with a fundamentally strong, mature, and franchise-driven business model. The analysis reveals a company with robust profitability and stable earnings growth, but this quality is fully priced in by the market at current valuation levels. The financial condition presents a mixed picture due to a strategic, highly leveraged capital structure designed to return capital to shareholders, resulting in negative equity but strong operational returns on assets.

Valuation
4/10
Profitability
8/10
Financial health
5/10
Operation Advice
  • Hold existing positions for income and stability.
  • The stock is fairly valued at the current price of $311.36, sitting between the conservative ($298.75) and base case ($328.63) target prices.
  • New investments should wait for a better entry point, potentially closer to the lower end of the target range ($298.75) or the recent 60-day low of $301.53, to improve the margin of safety.

Valuation

P/E TTM
27.78
P/E LYR
27.32
P/B MRQ
-132.81
P/S TTM
--
AI Analysis
  • The stock is considered fairly valued. The current P/E multiple of ~27.3x reflects a market premium for McDonald's stable earnings and strong brand, with the price near the lower end of its recent 60-day trading range. Target prices are calculated based on applying typical P/E multiples to the FY2025 EPS.
  • The current market price is $311.36 as of April 17, 2026.
  • Over the last 60 trading days, MCD traded between a low of $301.53 and a high of $341.35, with the recent price near the lower end.
  • The Trailing Twelve Months (TTM) P/E is 27.78 and the Forward (Dynamic) P/E is 27.32.
  • The TTM P/S ratio is 8.23, which is high but typical for a company with McDonald's high net margins.
  • Based on FY2025 Diluted EPS of $11.95 and a P/E multiple of ~27.3x, the current price is justified by earnings power.
  • A P/E range of 25x to 30x is typical for this quality defensive stock.
  • Conservative Target (25x P/E): $298.75.
  • Base Case Target (27.5x P/E): $328.63.
  • Optimistic Target (30x P/E): $358.50.
Valuation trend

Profitability

ROE TTM
-306.48%
Net margin
31.85%
Gross margin
57.41%
Total revenue
26.89B
AI Analysis
  • McDonald's demonstrates robust and stable profitability, a hallmark of its franchise-driven model, with strong earnings growth and industry-leading margins.
  • For the fiscal year ending December 31, 2025, Net Income grew by 4.13% year-over-year to $8.56B.
  • Quarterly data shows a return to earnings growth after a dip in Q1 2025.
  • The company maintains exceptionally high and stable margins.
  • The Gross Margin for FY2025 was 57.41%.
  • The Net Margin for FY2025 was 31.85%.
  • These industry-leading margins are sustained by high-margin franchise royalty and rent revenue streams.
  • The ROE-TTM of -306.48% is an artifact of negative shareholder equity and does not reflect poor operational performance.
  • The core profit-generating engine of the business remains powerful.
Profitability
2024Q42025Q12025Q22025Q32025Q4
ROE TTM---51.52%-125.70%-214.73%-306.48%
Earnings
2024Q42025Q12025Q22025Q32025Q4
Total revenue25.92B5.96B12.80B19.88B26.89B

Financial health

Debt/Asset
103.01%
Current ratio
0.95
Quick ratio
0.94
Cash ratio
0.94
AI Analysis
  • Financial health presents a mixed picture, heavily influenced by a strategic capital structure. Liquidity is tight but sufficient, while solvency metrics show high leverage due to shareholder returns funded by debt, though asset returns remain strong.
  • The current ratio is 0.95 and the quick ratio is 0.94, indicating just enough liquid assets to cover short-term liabilities.
  • This tight liquidity is common for asset-light, franchise-heavy models.
  • The debt-to-asset ratio is 103.01%, signifying total liabilities exceed total assets.
  • This results in negative shareholder equity on the balance sheet.
  • The negative equity is a direct result of significant share buybacks and dividends funded by debt, a strategic choice to return capital.
  • Consequently, the Price-to-Book (PB) ratio of -132.81 is not meaningful for valuation.
  • Despite the leveraged balance sheet, the Return on Assets (ROA-TTM) is 14.93%.
  • This indicates efficient use of the asset base to generate profits.
Leverage
2024Q42025Q12025Q22025Q32025Q4
Debt/Asset106.88%106.13%104.63%103.57%103.01%
Liquidity
2024Q42025Q12025Q22025Q32025Q4
Current ratio1.191.181.301.000.95