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Relative to Consumer Discretionary Sector Median (N=442)
Metric
MCD
Benchmark
P/E Ratio
25.1x
+3%
EV/EBITDA
17.6x
+259%
Price / Book
-63.6x
Implied Value Audit
OVERVALUED
Implied Fair Value (vs Sector)
-81.6%
$57.05Spot: $310.03
Spot
Implied
-50% Delta+50% Delta
Relative valuation derived from Consumer Discretionary sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 50GRADE C+
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
-253.6%
Sector: 6.2%
Dividend Analysis audit
INCOME
2.33%
Trailing Yield
$2.33
Per $100 Invested
Solid dividend yield for income-focused strategies.
Est. Payout Ratio
58%SAFE
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, MCDONALDS CORP (MCD) receives a "Hold" rating with a composite score of 49.6/100, ranked #1095 out of 4446 stocks. Key factor scores: Quality 50/100, Value 60/100, Momentum 44/100. This is quantitative analysis only — not investment advice.
MCDONALDS CORP (MCD) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does MCDONALDS CORP Do?
McDonald's Corporation operates and franchises McDonald's restaurants in the United States and internationally. Its restaurants offer hamburgers and cheeseburgers, chicken sandwiches and nuggets, wraps, fries, salads, oatmeal, shakes, desserts, sundaes, soft serve cones, bakery items, soft drinks, coffee, and beverages and other beverages, as well as breakfast menu, including biscuit and bagel sandwiches, breakfast burritos, hotcakes, and other sandwiches. As of December 31, 2021, the company operated 40,031 restaurants. McDonald's Corporation was founded in 1940 and is headquartered in Chicago, Illinois. MCDONALDS CORP (MCD) is classified as a mega-cap stock in the Consumer Discretionary sector, specifically within the Restaurants, Hotels, Motels industry. The company is led by CEO Christopher J. Kempczinski and employs approximately 150,000 people, headquartered in Oak Brook, Illinois. With a market capitalization of $218.8B, MCD is one of the largest companies in the Consumer Discretionary sector.
MCDONALDS CORP (MCD) Stock Rating — Hold (April 2026)
As of April 2026, MCDONALDS CORP receives a Hold rating with a composite score of 49.6/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.MCD ranks #1,095 out of 4,446 stocks in our coverage universe. Within the Consumer Discretionary sector, MCDONALDS CORP ranks #82 of 442 stocks, placing it in the top quartile of its Consumer Discretionary peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
MCD Stock Price and 52-Week Range
MCDONALDS CORP (MCD) currently trades at $310.03. The stock gained $0.48 (0.2%) in the most recent trading session. The 52-week high for MCD is $336.94, which means the stock is currently trading -8.0% from its annual peak. The 52-week low is $283.47, putting the stock 9.4% above its annual trough. Recent trading volume was 0 shares, suggesting relatively thin trading activity.
Is MCD Overvalued or Undervalued? — Valuation Analysis
MCDONALDS CORP (MCD) carries a value factor score of 60/100 in the Blank Capital model, indicating fair valuation relative to historical norms. The trailing price-to-earnings ratio is 25.09x, compared to the Consumer Discretionary sector average of 24.47x — a premium of 3%. The price-to-sales ratio is 8.12x, compared to 0.27x for the average Consumer Discretionary stock. On an enterprise value basis, MCD trades at 17.63x EV/EBITDA, versus 4.91x for the sector.
Overall, MCD's valuation appears roughly in line with sector benchmarks, suggesting the market is pricing the stock fairly given its current fundamentals and growth trajectory. Neither deep value nor significantly overpriced, the stock occupies a middle ground on valuation.
MCDONALDS CORP Profitability — ROE, Margins, and Quality Score
MCDONALDS CORP (MCD) earns a quality factor score of 50/100, indicating solid business quality with consistent operational execution. The return on equity (ROE) is -253.6%, compared to the Consumer Discretionary sector average of 6.2%, which is below typical expectations for high-quality companies. Return on assets (ROA) comes in at 14.5% versus the sector average of 2.5%.
On a margin basis, MCDONALDS CORP reports gross margins of 90.3%, compared to 36.9% for the sector. The operating margin is 46.4% (sector: 3.8%). Net profit margin stands at 32.3%, versus 2.1% for the average Consumer Discretionary stock. Revenue growth is running at 9.1% on a trailing basis, compared to 3.3% for the sector. The overall profitability profile is adequate, though there may be room for margin expansion.
MCD Debt, Balance Sheet, and Financial Health
MCDONALDS CORP has a debt-to-equity ratio of -1909.0%, compared to the Consumer Discretionary sector average of 89.0%. The low leverage indicates a conservative balance sheet with significant financial flexibility. The current ratio is 0.95x, which may signal near-term liquidity tightness. Total debt on the balance sheet is $40.00B. Cash and equivalents stand at $2.41B.
MCD has a beta of 0.17, meaning it is less volatile than the S&P 500, making it a relatively defensive holding. The stability factor score for MCDONALDS CORP is 95/100, indicating low-volatility characteristics and consistent price behavior that appeals to risk-averse investors.
MCDONALDS CORP Revenue and Earnings History — Quarterly Trend
In TTM 2026, MCDONALDS CORP reported revenue of $26.75B and earnings per share (EPS) of $12.00. Net income for the quarter was $8.65B. Gross margin was 90.3%. Operating income came in at $12.43B.
In FY 2025, MCDONALDS CORP reported revenue of $26.89B and earnings per share (EPS) of $12.00. Net income for the quarter was $8.56B. Revenue grew 3.7% year-over-year compared to FY 2024. Operating income came in at $12.39B.
In Q3 2025, MCDONALDS CORP reported revenue of $7.08B and earnings per share (EPS) of $3.20. Net income for the quarter was $2.28B. Gross margin was 90.6%. Revenue grew 3.0% year-over-year compared to Q3 2024. Operating income came in at $3.36B.
In Q2 2025, MCDONALDS CORP reported revenue of $6.84B and earnings per share (EPS) of $3.15. Net income for the quarter was $2.25B. Gross margin was 90.4%. Revenue grew 5.4% year-over-year compared to Q2 2024. Operating income came in at $3.23B.
Over the past 8 quarters, MCDONALDS CORP has demonstrated a growth trajectory, with revenue expanding from $6.49B to $26.75B. Investors analyzing MCD stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
MCD Dividend Yield and Income Analysis
MCDONALDS CORP (MCD) currently pays a dividend yield of 2.3%. At this yield, a $10,000 investment in MCD stock would generate approximately $$233.00 in annual dividend income. With a net margin of 32.3%, the dividend appears well-covered by earnings, suggesting sustainable payouts going forward.
MCD Momentum and Technical Analysis Profile
MCDONALDS CORP (MCD) has a momentum factor score of 44/100, reflecting neutral trend characteristics. The stock is neither significantly outperforming nor underperforming the broader market on a momentum basis. The investment factor score is 29/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 22/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
MCD vs Competitors — Consumer Discretionary Sector Ranking and Peer Comparison
Comparing MCD against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full MCD vs S&P 500 (SPY) comparison to assess how MCDONALDS CORP stacks up against the broader market across all factor dimensions.
MCD Next Earnings Date
No upcoming earnings date has been announced for MCDONALDS CORP (MCD) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy MCD? — Investment Thesis Summary
MCDONALDS CORP presents a balanced picture with arguments on both sides. The value score of 60/100 suggests attractive pricing relative to fundamentals. Low volatility (stability score 95/100) reduces downside risk.
In summary, MCDONALDS CORP (MCD) earns a Hold rating with a composite score of 49.6/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on MCD stock.
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Institutional Research Dossier
MCDONALDS CORP (MCD) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
We maintain a Hold rating on McDonald's (MCD), driven by its mature growth profile and a valuation that appears full, despite its strong brand and consistent profitability. While McDonald's boasts a wide economic moat and a proven ability to adapt to changing consumer preferences, its current market capitalization reflects these strengths, leaving limited upside potential for significant outperformance. The company's reliance on franchising provides a stable revenue stream, but also limits its ability to fully capitalize on menu innovation and technological advancements.
The primary concern is that future growth will be incremental, driven by price increases and modest traffic gains, rather than transformative initiatives. While McDonald's has successfully implemented digital ordering and delivery platforms, these initiatives are now largely priced into the stock. Investors seeking higher growth opportunities may find better value elsewhere in the consumer discretionary sector. The stability and dividend yield offer some downside protection, justifying the Hold rating, but the current valuation does not present a compelling buying opportunity.
Business Strategy & Overview
McDonald's operates a predominantly franchised business model, generating revenue through franchise fees and royalties based on a percentage of sales. This model provides a relatively stable and predictable revenue stream, reducing the company's capital expenditure requirements and operational risk. The company's strategy revolves around three core pillars: driving comparable sales growth, expanding its global footprint, and maximizing efficiency through technology and operational improvements.
Menu innovation is a key component of McDonald's strategy, with the company continuously introducing new items and limited-time offers to attract customers and drive traffic. Recent examples include variations on the McFlurry, seasonal offerings, and localized menu items tailored to specific regions. The company also focuses on enhancing the customer experience through digital ordering, mobile payments, and delivery services. These initiatives aim to improve convenience and accessibility, particularly for younger consumers.
McDonald's has invested heavily in technology to streamline operations and improve efficiency. Self-ordering kiosks, digital menu boards, and kitchen automation systems are designed to reduce labor costs and improve order accuracy. The company also leverages data analytics to optimize pricing, promotions, and inventory management. These technological investments are crucial for maintaining profitability in a competitive environment.
The company's strategic positioning within the quick-service restaurant (QSR) industry is centered on providing affordable and convenient meals to a broad customer base. McDonald's benefits from its extensive global network, brand recognition, and economies of scale. However, the company faces increasing competition from other QSR chains, fast-casual restaurants, and grocery stores offering prepared meals. To maintain its market share, McDonald's must continue to innovate and adapt to changing consumer preferences.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
9.1%
Sector: 3.3%
+175% VS SCTR
Economic Moat Analysis
McDonald's possesses a wide economic moat, primarily derived from its brand intangible asset and its extensive franchise network. The McDonald's brand is one of the most recognizable and valuable in the world, representing a consistent and familiar experience for consumers across diverse geographic regions. This brand recognition allows McDonald's to command premium pricing and attract a loyal customer base. The strength of the brand is reinforced by consistent marketing and advertising campaigns, further solidifying its position in the QSR industry.
The company's franchise network also contributes significantly to its economic moat. The scale and reach of the network create significant barriers to entry for potential competitors. Establishing a comparable network would require substantial capital investment and time, making it difficult for new entrants to challenge McDonald's dominance. Furthermore, the franchise model allows McDonald's to benefit from the entrepreneurial spirit and local knowledge of its franchisees, enhancing operational efficiency and responsiveness to local market conditions.
While McDonald's benefits from some degree of cost advantage due to its scale and efficient supply chain, this is not the primary driver of its economic moat. Other QSR chains have also achieved significant scale and operational efficiencies. The key differentiator for McDonald's is its brand intangible asset and the network effect created by its franchise system.
The moat's width is relatively stable. While competition is intensifying, McDonald's continues to invest in its brand and adapt to changing consumer preferences. The company's digital initiatives and menu innovations are designed to maintain its competitive edge and reinforce its brand loyalty. However, the company must remain vigilant in monitoring consumer trends and adapting its offerings to avoid losing market share to more innovative or health-conscious competitors.
Financial Health & Profitability
McDonald's demonstrates strong financial health, characterized by consistent revenue growth, high margins, and robust cash flow generation. The company's revenue has shown steady growth over the past several years, driven by comparable sales increases and expansion of its global footprint. The TTM revenue of $26.89 billion represents a 9.1% increase compared to the sector average of 3.2%, indicating McDonald's ability to outperform its peers.
The company's gross margin of 90.3% and operating margin of 46.4% are significantly higher than the sector averages of 36.9% and 3.8%, respectively. These high margins reflect McDonald's strong brand pricing power and efficient cost management. The net margin of 32.3% further underscores the company's profitability. The quarterly financial history shows a consistent trend of high gross and operating margins, indicating the sustainability of these profitability levels.
However, the company's balance sheet exhibits a high level of debt, with total debt of $40.00 billion and a negative debt-to-equity ratio of -1,909.00. This high leverage is a result of the company's share repurchase program and dividend payments, which have been funded in part by debt. While the company's strong cash flow generation provides some comfort, the high debt level increases its financial risk and limits its flexibility to pursue strategic acquisitions or investments.
The current ratio of 0.95 indicates that McDonald's has slightly more current liabilities than current assets, suggesting a potential liquidity risk. However, the company's consistent cash flow generation and access to capital markets mitigate this risk. The free cash flow of $203.17 million appears low relative to net income, warranting further investigation into capital expenditures and working capital management. Overall, McDonald's financial health is strong, but the high debt level and low current ratio are areas of concern that require close monitoring.
Valuation Assessment
McDonald's valuation appears full based on several key metrics. The company's P/E ratio of 25.7x is slightly below the sector average of 28.0x, but this does not necessarily indicate undervaluation. Given McDonald's mature growth profile, a P/E ratio in line with the sector average may be justified, but does not offer a compelling buying opportunity. The EV/EBITDA multiple of 4.5x is also below the sector average of 5.3x, but this is likely due to the company's high debt level, which increases its enterprise value.
The company's negative return on equity (ROE) of -253.6% is a significant concern. This negative ROE is primarily due to the company's high debt level and share repurchase program, which have reduced its equity base. While the company's net income is strong, the negative ROE indicates that it is not generating an adequate return on its invested capital. This is a key factor contributing to the Hold rating.
The free cash flow yield is difficult to assess given the low reported free cash flow figure. A more detailed analysis of the company's cash flow statement is needed to determine the true free cash flow generation potential. However, based on the available data, the free cash flow yield appears low, suggesting that the stock is not undervalued based on this metric.
Overall, McDonald's valuation appears fair to slightly expensive, given its mature growth profile, high debt level, and negative ROE. While the company's strong brand and consistent profitability provide some downside protection, the current valuation does not offer a compelling buying opportunity. Investors may find better value elsewhere in the consumer discretionary sector.
Risk & Uncertainty
McDonald's faces several specific risks that could impact its future performance. One of the primary risks is increasing competition from other QSR chains, fast-casual restaurants, and grocery stores offering prepared meals. The QSR industry is highly competitive, and McDonald's must continuously innovate and adapt to changing consumer preferences to maintain its market share. Failure to do so could result in declining sales and profitability.
Another significant risk is changing consumer preferences, particularly regarding health and nutrition. Consumers are increasingly demanding healthier and more sustainable food options. McDonald's has made efforts to offer healthier menu items, but it still faces criticism for its reliance on processed foods and sugary drinks. A failure to adapt to these changing preferences could result in a loss of customers to competitors offering healthier alternatives.
Regulatory risks also pose a threat to McDonald's business. The company is subject to various regulations related to food safety, labor practices, and environmental protection. Changes in these regulations could increase the company's operating costs and reduce its profitability. For example, minimum wage increases could significantly impact the company's labor costs, particularly in markets with high labor costs.
The company's reliance on franchising also presents certain risks. McDonald's is dependent on its franchisees to maintain the quality and consistency of its restaurants. Poorly managed or underperforming franchises could damage the company's brand reputation and negatively impact sales. Furthermore, disputes with franchisees could disrupt operations and lead to legal challenges.
Bulls Say / Bears Say
The Bull Case
BULL VIEWMcDonald's brand is globally recognized and incredibly strong, providing a durable competitive advantage and pricing power.
BULL VIEWThe company's consistent dividend payouts and share repurchase programs offer a reliable return of capital to shareholders, making it an attractive investment in a volatile market.
The Bear Case
BEAR VIEWMcDonald's mature growth profile limits its upside potential, and the current valuation already reflects its strong brand and consistent profitability.
BEAR VIEWThe company's high debt level and negative ROE raise concerns about its financial health and ability to generate adequate returns on invested capital.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score MCD and 4,400+ other equities.
MCDONALDS CORP exhibits a 34% valuation discount relative to institutional benchmarks. This represents a constructive entry window based on current multiples.
Return on Assets
Efficiency of asset utilization
14.5%
Sector: 2.5%
Gross Margin
Pricing power and cost efficiency
90.3%
Sector: 36.9%
Operating Margin
Core business profitability
46.4%
Sector: 3.8%
Net Margin
Bottom-line profitability
32.3%
Sector: 2.1%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
Sector Avg Yield0.00%
Yield Delta—
Income Projection audit
A $10,000 investment would generate approximately $233 annually in dividends at the current trailing rate.
