MCD Valuation

McDonald's Corp

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316.390

+0.63(0.200%)1D

Overview
Forecast
Valuation
Earnings

MCD Relative Valuation

MCD's fair value is calculated using relative valuation, based on historical P/E and P/S ranges and their premiums/discounts relative to a competitor average, adjusted by weights. If the market price exceeds this fair value range, MCD is overvalued; if below, it's undervalued.

Historical Valuation

McDonald's Corp (MCD) is now in the Fair zone, suggesting that its current forward PE ratio of 24.44 is considered Fairly compared with the five-year average of 24.52. The fair price of McDonald's Corp (MCD) is between 311.20 to 347.10 according to relative valuation methord.

Relative Value

Fair Zone

311.20-347.10

Current Price：316.55

Fair

24.49

Trailing

Forward

18.23

EV/EBITDA

McDonald's Corp. (MCD) has a current EV/EBITDA of 18.23. The 5-year average EV/EBITDA is 18.22. The thresholds are as follows: Strongly Undervalued below 16.29, Undervalued between 16.29 and 17.26, Fairly Valued between 19.19 and 17.26, Overvalued between 19.19 and 20.15, and Strongly Overvalued above 20.15. The current Forward EV/EBITDA of 18.23 falls within the Historic Trend Line -Fairly Valued range.

21.32

EV/EBIT

McDonald's Corp. (MCD) has a current EV/EBIT of 21.32. The 5-year average EV/EBIT is 21.44. The thresholds are as follows: Strongly Undervalued below 18.87, Undervalued between 18.87 and 20.16, Fairly Valued between 22.73 and 20.16, Overvalued between 22.73 and 24.02, and Strongly Overvalued above 24.02. The current Forward EV/EBIT of 21.32 falls within the Historic Trend Line -Fairly Valued range.

8.15

McDonald's Corp. (MCD) has a current PS of 8.15. The 5-year average PS is 7.80. The thresholds are as follows: Strongly Undervalued below 6.83, Undervalued between 6.83 and 7.31, Fairly Valued between 8.28 and 7.31, Overvalued between 8.28 and 8.76, and Strongly Overvalued above 8.76. The current Forward PS of 8.15 falls within the Historic Trend Line -Fairly Valued range.

21.46

P/OCF

McDonald's Corp. (MCD) has a current P/OCF of 21.46. The 5-year average P/OCF is 20.43. The thresholds are as follows: Strongly Undervalued below 16.32, Undervalued between 16.32 and 18.38, Fairly Valued between 22.48 and 18.38, Overvalued between 22.48 and 24.53, and Strongly Overvalued above 24.53. The current Forward P/OCF of 21.46 falls within the Historic Trend Line -Fairly Valued range.

27.15

P/FCF

McDonald's Corp. (MCD) has a current P/FCF of 27.15. The 5-year average P/FCF is 25.64. The thresholds are as follows: Strongly Undervalued below 20.37, Undervalued between 20.37 and 23.00, Fairly Valued between 28.27 and 23.00, Overvalued between 28.27 and 30.91, and Strongly Overvalued above 30.91. The current Forward P/FCF of 27.15 falls within the Historic Trend Line -Fairly Valued range.

McDonald's Corp (MCD) has a current Price-to-Book (P/B) ratio of -81.64. Compared to its 3-year average P/B ratio of -43.47 , the current P/B ratio is approximately 87.81% higher. Relative to its 5-year average P/B ratio of -37.23, the current P/B ratio is about 119.27% higher. McDonald's Corp (MCD) has a Forward Free Cash Flow (FCF) yield of approximately 3.06%. Compared to its 3-year average FCF yield of 3.18%, the current FCF yield is approximately -3.80% lower. Relative to its 5-year average FCF yield of 3.24% , the current FCF yield is about -5.64% lower.

-81.80

P/B

Median3y

-43.47

Median5y

-37.23

3.06

FCF Yield

Median3y

3.18

Median5y

3.24

Competitors Valuation Multiple

The average P/S ratio for MCD's competitors is 4.36, providing a benchmark for relative valuation. McDonald's Corp Corp (MCD) exhibits a P/S ratio of 8.15, which is 86.87% above the industry average. Given its robust revenue growth of 5.44%, this premium appears unsustainable.

P/S

P/E

EV/EBITDA

EV/EBIT

P/S

Revenue Growth

Market Cap

Chipotle Mexican Grill Inc

Restaurant Brands International Inc

Darden Restaurants Inc

1.86

10.63%

24.28B

Performance Decomposition

Market capitalization of MCD increased by 5.53% over the past 1 year. The primary factor behind the change was an increase in Margin Expansion from 31.16 to 32.92.

The secondary factor is the Revenue Growth, contributed 5.44%to the performance.

Overall, the performance of MCD in the past 1 year is driven by Margin Expansion. Which is more sustainable.

5.44%

6.49B → 6.84B

Revenue Growth

5.65%

31.16 → 32.92

Margin Expansion

-5.56%

28.70 → 27.11

P/E Change

5.53%