MCD
MCDONALDS CORPNYSEValuation snapshot
Below bear casePrice is below even the bear case.
Price as of Sep 4, 2026 · Valuation Sep 6, 2026
What drives MCD's base case?
base-case thesisMcDonald's entered the forecast with growing revenue, strong profit conversion, and an expanding restaurant network. Slower sales at established restaurants keep the outlook measured, but new locations and the franchise-heavy model support continued growth without requiring McDonald's to fund every opening. Profitability stays close to its recent level while investment remains elevated during the expansion program.
What shapes the assumptions
First-half 2026 reported revenue growth of 0.06
Consolidated revenue growth
Raises revenue growth
Unit expansion expected to add 0.025 to 2026 systemwide-sales growth
Incremental sales from restaurant expansion
Raises revenue growth
Approximately 0.90 of restaurant margin dollars came from franchised operations
Share of restaurant profit generated by franchises
Raises operating margin
Capital expenditures increased to $3.365 billion in 2025
Annual capital spending
Raises reinvestment
Each driver links a business metric to the forecast assumption it shapes — the basis for this case, not investment advice.
Why the gap?
No revenue growth rate in a sensible range reproduces today's price — the market appears to be valuing something this model does not capture.
What else could explain it?›
- Or, holding growth steady
- the price is also consistent with a 1.4% operating margin, against the 47.0% assumed here.
- How confident is this estimate?
- Robustness 51.0/10 (Moderate) — some of any gap is our own uncertainty rather than disagreement.
- What would change the answer?
- Which assumption this valuation swings on, and by how much.
Many combinations of assumptions reproduce the same price. These are ways to read what the market might be expecting, not the market's actual view. How this is worked out
Research & assumptions
Inspect the valuation thesis, cases, risks, evidence, and model inputs.
View details
Research & assumptions
Inspect the valuation thesis, cases, risks, evidence, and model inputs.
Three independently researched cases generated automatically from published financials. Every assumption is justified and cited; the discount rate is computed from researched market inputs.
Company value drivers
Ranked operating metrics and the valuation assumptions they influence.
1. U.S. comparable sales growth, annual
Measures annual sales growth at established U.S. restaurants, capturing the combined effect of customer traffic, menu pricing, and product mix.
2.1%
reported2. GAAP operating margin, annual
Measures the share of consolidated revenue remaining after operating expenses and is the principal bridge from sales to operating cash generation.
46.1%
reported3. Systemwide restaurants, year-end
Measures the size of the restaurant network generating company-operated sales, rent, and royalty revenue.
45,356
reported4. Capital expenditures, annual
Measures McDonald's annual cash investment in new restaurants, existing locations, technology, and corporate assets.
$3.4B
reportedBase inputs from financials
source period →Base revenue (TTM)
$27.7B
Diluted shares
711
Net cash
-$39B
Bear
medium confidence$793,737,710.76
IV / share
+305,718,696.3% vs $259.63
- Explicit cash flows
- $43,699,421.18
- Terminal value
- $804,940,553.68
- Net cash
- -$54,902,264.10
- Intrinsic value / share
- $793,737,710.76
101.4% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
Revenue growth2.5% → 2.2% → 2.0% → 1.8% → 1.6%medium
How derived: Second-quarter comparable sales grew only 0.013 and U.S. guest counts declined, so revenue growth is modeled below the recent reported pace and gradually fades as new-store benefits mature.
Why this confidence: Recent reported sales and traffic data ↑, Five-year demand and currency uncertainty ↓
Measured by
- U.S. comparable sales growth, annual2.1%reported
- Systemwide restaurants, year-end45,356reported
- Capital expenditures, annual$3.4Breported
Evidence for
- Global comparable sales increased 0.013 in the second quarter of 2026, while U.S. comparable guest counts declined.[McDonald's Q2 2026 Form 10-Q]· primary
Evidence against
- First-half 2026 consolidated revenue increased 0.06 as reported, and management expects unit expansion to add approximately 0.025 to 2026 systemwide-sales growth.[McDonald's Q2 2026 Form 10-Q]· primary
Operating margin44.0%medium
How derived: Recent quarterly profitability remained near 0.45 to 0.47, but negative U.S. traffic, inflation at company-operated restaurants, and rising administrative expense support a decline to 0.44.
Why this confidence: Management's current-year profitability guidance ↑, Uncertain future labor, food, and administrative costs ↓
Measured by
- U.S. comparable sales growth, annual2.1%reported
- GAAP operating margin, annual46.1%reported
Evidence for
- McDonald's reported ongoing inflationary cost pressure at company-operated restaurants, while higher administrative expense partly offset franchise-margin growth.[McDonald's 2025 Form 10-K]· primary
Evidence against
- Management still expects full-year 2026 profitability in the mid-to-high 0.40s, and franchised operations generated approximately 0.90 of restaurant margin dollars.[McDonald's Q2 2026 Form 10-Q]· primary
Tax rate23.0%high
How derived: The assumption uses the top of management's 0.21 to 0.23 full-year 2026 range because foreign, state, and cross-border taxes could prevent recent discrete benefits from recurring.
Why this confidence: Explicit management tax guidance ↑, Geographic mix and audit-related volatility ↓
No tracked driver measures this assumption yet.
Evidence for
- Management forecasts a 2026 effective income-tax rate between 0.21 and 0.23 and warns that quarterly results may fall outside that range.[McDonald's Q2 2026 Form 10-Q]· primary
Evidence against
- The effective rate was 0.207 in the first half of 2026 and 0.214 for full-year 2025.[McDonald's Q2 2026 Form 10-Q]· primary
Reinvestment rate32.0%medium
How derived: Reinvestment is set at 0.32 of after-tax operating profit because 2026 capital spending is guided to $3.7 billion to $3.9 billion while slower growth would imply weaker returns on that elevated spending.
Why this confidence: Explicit near-term capital-spending plan ↑, Reinvestment-to-profit conversion requires modeling judgment ↓
Measured by
- Systemwide restaurants, year-end45,356reported
- Capital expenditures, annual$3.4Breported
Evidence for
- Management expects 2026 capital expenditures of $3.7 billion to $3.9 billion, following a 0.21 increase in capital expenditures during 2025.[McDonald's Q2 2026 Form 10-Q]· primary
Evidence against
- Developmental licensees and affiliates are expected to fund more than 1,800 of the approximately 2,600 planned 2026 openings, limiting McDonald's own capital burden.[McDonald's Q2 2026 Form 10-Q]· primary
Terminal growth2.0%medium
How derived: The mature-state rate is limited to the Federal Reserve's 0.02 longer-run inflation objective, assuming little lasting real growth after McDonald's current expansion program ends.
Why this confidence: Official long-run inflation objective ↑, Terminal period is inherently distant ↓
Measured by
- Systemwide restaurants, year-end45,356reported
Evidence for
- The Federal Reserve reaffirmed a 0.02 longer-run inflation objective, providing a defensible nominal-growth floor for a mature business.[Federal Reserve July 2026 Monetary Policy Report]· primary
Evidence against
- McDonald's expects approximately 2,100 net restaurant additions in 2026 and is targeting 50,000 global restaurants, indicating near-term real expansion.[McDonald's Q2 2026 Form 10-Q]· primary
Base
medium confidence$1,758,006,623.17
IV / share
+677,119,887.4% vs $259.63
- Explicit cash flows
- $52,834,418.93
- Terminal value
- $1,760,074,468.34
- Net cash
- -$54,902,264.10
- Intrinsic value / share
- $1,758,006,623.17
100.1% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
Revenue growth4.5% → 4.2% → 3.8% → 3.5% → 3.2%medium
How derived: First-half reported revenue grew 0.06 and planned unit expansion adds roughly 0.025 to systemwide sales, but slower established-store sales support a fade from 0.045 to 0.032.
Why this confidence: Reported revenue plus quantified unit-growth contribution ↑, Revenue differs from systemwide sales and is currency-sensitive ↓
Measured by
- U.S. comparable sales growth, annual2.1%reported
- Systemwide restaurants, year-end45,356reported
- Capital expenditures, annual$3.4Breported
Evidence for
- First-half 2026 consolidated revenue increased 0.06 as reported, while management expects unit expansion to contribute approximately 0.025 to 2026 systemwide-sales growth.[McDonald's Q2 2026 Form 10-Q]· primary
Evidence against
- Second-quarter global comparable sales slowed to 0.013 and U.S. comparable guest counts were negative.[McDonald's Q2 2026 Form 10-Q]· primary
Operating margin47.0%high
How derived: A 0.47 target holds profitability near recent quarters and within management's mid-to-high 0.40s outlook, supported by the predominantly franchised mix.
Why this confidence: Current results align with management guidance ↑, Longer-term cost inflation and restructuring ↓
Measured by
- U.S. comparable sales growth, annual2.1%reported
- GAAP operating margin, annual46.1%reported
Price implies: 1.4% vs our 47.0% — one of several sets that fit this price
Evidence for
- Management expects full-year 2026 profitability in the mid-to-high 0.40s, and the reported second-quarter 2026 margin was approximately 0.470.[McDonald's Q2 2026 Form 10-Q]· primary
Evidence against
- Higher administrative expenses partly offset sales-driven franchise-margin growth during the first half of 2026.[McDonald's Q2 2026 Form 10-Q]· primary
Tax rate22.0%high
How derived: The assumption uses the midpoint of management's 0.21 to 0.23 full-year range, modestly above the 0.214 reported for 2025.
Why this confidence: Narrow explicit management range ↑, Discrete tax items and international exposure ↓
No tracked driver measures this assumption yet.
Evidence for
- Management expects a full-year 2026 effective income-tax rate between 0.21 and 0.23.[McDonald's Q2 2026 Form 10-Q]· primary
Evidence against
- The first-half 2026 effective tax rate was only 0.207, although the second quarter included discrete restructuring-related benefits.[McDonald's Q2 2026 Form 10-Q]· primary
Reinvestment rate28.0%medium
How derived: Reinvestment is set at 0.28 of after-tax operating profit because capital spending is rising to fund expansion, while franchisees finance most planned openings and reduce McDonald's corporate cash requirement.
Why this confidence: Three-year capital-spending history and current guidance ↑, Working-capital and acquisition requirements can vary ↓
Measured by
- Systemwide restaurants, year-end45,356reported
- Capital expenditures, annual$3.4Breported
Evidence for
- Capital expenditures rose from $2.357 billion in 2023 to $3.365 billion in 2025 and are guided to $3.7 billion to $3.9 billion in 2026.[McDonald's 2025 Form 10-K]· primary
Evidence against
- Approximately 0.95 of restaurants are franchised, and licensees and affiliates are expected to fund more than 1,800 planned 2026 openings.[McDonald's Q2 2026 Form 10-Q]· primary
Terminal growth2.5%medium
How derived: The mature-state rate adds modest real unit growth to the Federal Reserve's 0.02 inflation objective but remains below the explicit five-year forecast as McDonald's approaches a larger store base.
Why this confidence: Official inflation anchor and disclosed store pipeline ↑, Very long forecast horizon ↓
Measured by
- Systemwide restaurants, year-end45,356reported
Evidence for
- McDonald's expects approximately 2,100 net restaurant additions in 2026, supporting some real growth above long-run inflation.[McDonald's Q2 2026 Form 10-Q]· primary
Evidence against
- The Federal Reserve's longer-run inflation objective is 0.02, and perpetual growth materially above inflation becomes difficult for a mature global chain.[Federal Reserve July 2026 Monetary Policy Report]· primary
Bull
low confidence$8,259,259,219.01
IV / share
+3,181,165,103.9% vs $259.63
- Explicit cash flows
- $61,900,025.50
- Terminal value
- $8,252,261,457.61
- Net cash
- -$54,902,264.10
- Intrinsic value / share
- $8,259,259,219.01
99.9% of the value rests on the terminal value — high dependency. A small change to terminal growth moves the valuation a lot — see terminal growth below.
Revenue growth6.5% → 6.0% → 5.5% → 5.0% → 4.5%low
How derived: The path assumes the first-half 0.06 reported growth persists as approximately 2,100 net 2026 additions ramp, loyalty improves visit frequency, and established-store sales recover.
Why this confidence: Large disclosed restaurant-development pipeline ↑, Requires a sustained traffic recovery not yet reported ↓, Currency contributed materially to recent reported growth ↓
Measured by
- U.S. comparable sales growth, annual2.1%reported
- Systemwide restaurants, year-end45,356reported
- Capital expenditures, annual$3.4Breported
Evidence for
- First-half reported revenue increased 0.06, management expects about 2,100 net restaurant additions in 2026, and the company says loyalty is increasing visit frequency.[McDonald's Q2 2026 Form 10-Q]· primary
Evidence against
- Second-quarter constant-currency revenue growth was only 0.02, global comparable sales grew 0.013, and U.S. guest counts declined.[McDonald's Q2 2026 Form 10-Q]· primary
Operating margin49.0%low
How derived: The target rises to 0.49 because continued franchise-led growth could add high-margin rent and royalty revenue while spreading corporate costs across a larger system.
Why this confidence: Highly franchised business mix ↑, Target exceeds current management guidance ↓
Measured by
- U.S. comparable sales growth, annual2.1%reported
- GAAP operating margin, annual46.1%reported
Evidence for
- Approximately 0.95 of restaurants were franchised and franchised operations represented about 0.90 of restaurant margin dollars, providing substantial operating leverage.[McDonald's 2025 Form 10-K]· primary
Evidence against
- Management's 2026 outlook is only for profitability in the mid-to-high 0.40s, and higher administrative expense has offset part of the franchise-margin growth.[McDonald's Q2 2026 Form 10-Q]· primary
Tax rate21.0%medium
How derived: The assumption uses the bottom of management's 0.21 to 0.23 range, consistent with the 0.207 first-half rate but without assuming the temporary quarterly benefit persists indefinitely.
Why this confidence: Recent effective rate and management range ↑, Assumes favorable geographic and tax-item mix ↓
No tracked driver measures this assumption yet.
Evidence for
- The first-half 2026 effective tax rate was 0.207, and management's full-year range begins at 0.21.[McDonald's Q2 2026 Form 10-Q]· primary
Evidence against
- The second-quarter rate included discrete restructuring-related tax benefits, while state, foreign, and cross-border taxes pushed the 2025 rate above the U.S. statutory rate.[McDonald's 2025 Form 10-K]· primary
Reinvestment rate24.0%low
How derived: Reinvestment is limited to 0.24 of after-tax operating profit because licensees fund most new locations and stronger sales make each dollar of McDonald's spending more productive.
Why this confidence: Franchisees finance most planned openings ↑, Assumes unusually strong capital efficiency ↓
Measured by
- Systemwide restaurants, year-end45,356reported
- Capital expenditures, annual$3.4Breported
Evidence for
- Developmental licensees and affiliates are expected to supply capital for more than 1,800 of approximately 2,600 planned 2026 openings.[McDonald's Q2 2026 Form 10-Q]· primary
Evidence against
- McDonald's own capital expenditures are expected to rise to $3.7 billion to $3.9 billion in 2026, with an additional sequential increase planned for 2027.[McDonald's 2025 Form 10-K]· primary
Terminal growth3.0%low
How derived: The mature-state rate assumes McDonald's brand and franchise model preserve roughly 0.01 real growth above the Federal Reserve's 0.02 inflation objective after the explicit forecast.
Why this confidence: Demonstrated international unit-expansion runway ↑, Perpetual real growth assumption ↓, Large existing global footprint ↓
Measured by
- Systemwide restaurants, year-end45,356reported
Evidence for
- McDonald's is still adding restaurants rapidly, with approximately 2,100 net additions expected in 2026 and a stated target of 50,000 global locations.[McDonald's Q2 2026 Form 10-Q]· primary
Evidence against
- The Federal Reserve's longer-run inflation objective is 0.02, making perpetual nominal growth of 0.03 demanding for a company already operating more than 46,000 restaurants.[Federal Reserve July 2026 Monetary Policy Report]· primary
Valuation robustness
reliability of the estimate, not a stock rating51 / 100 · Moderate
Formula v1.0.0. Higher means a more reliable estimate — not a recommendation.
Quality checks
Automated model-risk flags — warnings, not recommendations.
- 100% of the intrinsic value rests on the terminal value — a small change to terminal growth moves the valuation a lot.→ terminal growth
- The bear-to-bull range spans 425% of the base value — the outcome is highly uncertain.→ scenarios
Per-share economics
Business growth after changes in the diluted share count.
| Period | Revenue growth | FCF/share | FCF/share growth | Shares | Share growth |
|---|---|---|---|---|---|
| Q3 2024 | 2.7% | 2.7M | -19.8% | 720 | -1.6% |
| Q1 2025 | -3.5% | 2.61M | 2.9% | 718.2 | -1.1% |
| Q2 2025 | 5.4% | 1.75M | 18.9% | 717.6 | -0.6% |
| Q3 2025 | 3.0% | 3.38M | 25.2% | 715.9 | -0.6% |
| Q1 2026 | 9.4% | 2.42M | -7.2% | 713.5 | -0.7% |
| Q2 2026 | 3.7% | 2.78M | 59.0% | 711.1 | -0.9% |
Valuation history every run
History builds as the valuation is recalculated — this is the first recorded run.
Market inputs researched
The 0.0413 yield reported for September 4, 2026 is used as the nominal U.S.-dollar risk-free rate.
The published five-year monthly regression beta of 0.42 is used to represent McDonald's historically defensive equity sensitivity.
The June 1, 2026 trailing-twelve-month adjusted-payout implied U.S. equity risk premium is used rather than a historical average.
The September 4, 2026 regular-session closing price is the latest completed-market price available as of the valuation date.
Generated 9/6/2026, 3:49:25 AM · pipeline v1.2.0