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McDonald's valuation

MCDONALDS CORP · NYSE: MCD · Consumer discretionary · Updated Sep 25, 2026

Price-implied growth
5.8%
year-1 revenue growth the price implies at our base-case margin (base case: 5.7%)
Price-implied margin
48.8%
target operating margin at our base-case growth (base case: 48.6%)
Base-case model value
$236.02
range $135.31 – $375.01 (Bear–Bull)
Price vs. base case
±0%
reference price $237.10 (IEX last trade, Sep 24, 2026)
Market value
$168B
$237.10 × 707.6 m diluted shares
WACC
7.6%
years 1–5, then moving to 8.9% (mature company)

McDonald's's revenue grew 6.3% over the last twelve months and 5.1% a year over three years. Today's price of $237.10 implies 5.8% revenue growth in year 1, fading to 4.8% by year 10, at an operating margin of 48.6%.

Our base case continues the trend (5.7%, fading), moves the operating margin from 49.1% to 48.6% by year 5 and reinvests $1.32 of capital for each additional dollar of revenue. Discounted at 7.6%, that gives a base-case model value of $236.02 per share (bear $135.31, bull $375.01); the price is 0% above the base case.

Model value per share: bear, base, bull – and the price
Bear $135.31 – Bull $375.01Base: $236.02Base $236.02Bear $135.31Bull $375.01Price: $237.10Price $237.10

Bear: growth 5 percentage points lower, target margin 20% lower. Bull: growth 5 points higher, target margin 20% higher. Cost of capital and capital intensity as in the base case.

Model value = output of a fixed, published method; not a price target, not a recommendation. How the model works

How we got this number

1Historical base from the filingsReported fact

All figures come from the XBRL data in the company's SEC filings (10-K, 10-Q), in US dollars. "TTM" = trailing twelve months. EBITA = operating income before amortisation of acquired intangibles and before expensed acquired R&D – both consequences of past acquisitions, which the model does not extrapolate.

Revenue and EBITA
RevenueEBITA
0$10B$20B$30B12/20 · Revenue: $19.2B12/20 · EBITA: $7.32B12/2012/21 · Revenue: $23.2B12/21 · EBITA: $10.4B12/2112/22 · Revenue: $23.2B12/22 · EBITA: $9.37B12/2212/23 · Revenue: $25.5B12/23 · EBITA: $11.6B12/2312/24 · Revenue: $25.9B12/24 · EBITA: $11.7B12/2412/25 · Revenue: $26.9B12/25 · EBITA: $12.4B12/25TTM · Revenue: $27.7BTTM · EBITA: $12.8BTTM
Data tableFY12/2020FY12/2021FY12/2022FY12/2023FY12/2024FY12/2025TTM06/2026
Revenue $19.2B$23.2B$23.2B$25.5B$25.9B$26.9B$27.7B
Revenue growth –20.9%−0.2%10.0%1.7%3.7%6.3%
Operating income (EBIT) $7.32B$10.4B$9.37B$11.6B$11.7B$12.4B$12.8B
EBITA $7.32B$10.4B$9.37B$11.6B$11.7B$12.4B$12.8B
EBITA margin 38.1%44.6%40.4%45.7%45.2%46.1%46.2%
Effective tax rate 23.0%17.3%21.1%19.5%20.5%21.4%–
Net income $4.73B$7.55B$6.18B$8.47B$8.22B$8.56B$8.79B
Operating cash flow $6.27B$9.14B$7.39B$9.61B$9.45B$10.6B$11.3B
Capital expenditure $1.64B$2.04B$1.90B$2.36B$2.77B$3.37B$3.59B
Free cash flow (CFO − capex) $4.62B$7.10B$5.49B$7.25B$6.67B$7.19B$7.76B
Operating invested capital ––$37.2B$40.8B$45.7B$52.8B$51.8B
Sales / capital ––0.620.630.570.510.54
ROIC ––19.9%23.0%20.4%18.5%20.9%

Operating invested capital = equity + financial debt incl. leases − cash − goodwill − acquired intangibles − equity-method stakes: the capital that organic growth actually ties up. ROIC = EBITA × (1 − tax rate) / operating capital (TTM column: incl. lease interest, latest balance sheet). TTM revenue = FY ending 2025-12-31 ($26.9B) + year-to-date to 2026-06-30 ($13.6B) − prior-year period ($12.8B).

XBRL source of each line

2Cost of equity (CAPM)Market dataAssumption

kE = rf + β × ERP = 4.79% + 0.98 × 4.14% = 8.84%
  • rf 4.79% – 10-year US Treasury yield on Sep 1, 2026, the date of the equity risk premium estimate (the two must match; today: 5.18% on Sep 24, 2026) (U.S. Treasury).
  • ERP 4.14% – implied equity risk premium of the S&P 500 by Aswath Damodaran as of Sep 1, 2026 (NYU Stern). It is backed out of current index prices and expected cash flows, not historical averages.
  • β 0.98 – bottom-up beta: the "Restaurant/Dining" industry (64 US firms, Damodaran, January 2026) has a cash-corrected unlevered beta of 0.78. Relevered with McDonald's's leverage (debt incl. leases / market value = 33.9%):
    β = βU × (1 + (1 − t) × D/E) = 0.78 × (1 + 0.75 × 0.339) = 0.98
  • In the mature state (from year 10) we set β = 1: kE = 4.79% + 4.14% = 8.93%, the market's expected return. In years 6–10 the cost of capital moves there linearly.

3Cost of debtReported factAssumption

Interest coverage = EBIT / interest expense (TTM) = $12.8B / $1.62B = 7.9x. In Damodaran's table for large non-financial firms (January 2026) this maps to a synthetic rating of Aa2/AA with a 0.55% default spread.

kD = (rf + spread) × (1 − t) = (4.79% + 0.55%) × (1 − 25%) = 4.00%

Tax rate 25%: 21% federal plus about 4% state taxes (marginal rate).

4Weighted average cost of capital (WACC)Market dataModel output

WACC = E/(D+E) × kE + D/(D+E) × kD = 74.7% × 8.84% + 25.3% × 4.00% = 7.62%

E = market value $168B (Sep 24, 2026); D = financial debt incl. lease liabilities $56.9B (book value as a proxy). This WACC applies to years 1–5; by year 10 it moves to 8.93%, the cost of capital of an average mature company (rf + ERP) – the rate at which Damodaran's implied premium discounts the market beyond year 5.

5Forecast and discounted cash flowsAssumptionModel output

DriverBase caseHow it is set
Revenue growth, year 15.7%Average of the 3-year CAGR (5.1%) and trailing-twelve-month growth (6.3%); fades linearly to 4.8% by year 10.
Operating margin49.1% → 48.6%Currently 49.1% (EBITA incl. lease interest); target in year 5: the company's own recent level (48.6%, average of three fiscal years and TTM), as it is above the industry (13.8%).
Tax rate20.5% → 25%Effective rate of the last three years (years 1–5), then moving to the marginal rate.
Sales / capital0.76Reinvestment = revenue increase / 0.76. Company average 0.57, bounded to 0.5–2× the industry value (1.51).
Terminal ROIC18.4%The lower of the company's return on capital (20.9%) and the industry's (18.4%), but at least the cost of capital (8.9%). Terminal reinvestment rate = g / ROIC = 26.1%.
Growth after year 104.79%= risk-free rate (Damodaran's default; his implied premium is computed the same way).

Industry values: Damodaran, "Restaurant/Dining", January 2026 (pre-tax lease-adjusted operating margin; sales / invested capital; after-tax return on capital).

Year12345678910
Revenue growth5.7%5.6%5.5%5.4%5.3%5.2%5.1%5.0%4.9%4.8%
Revenue$29.3B$30.9B$32.6B$34.4B$36.2B$38.1B$40.0B$42.0B$44.0B$46.1B
Operating margin49.0%48.9%48.8%48.7%48.6%48.6%48.6%48.6%48.6%48.6%
Operating income$14.3B$15.1B$15.9B$16.7B$17.6B$18.5B$19.4B$20.4B$21.4B$22.4B
Tax rate20.5%20.5%20.5%20.5%20.5%21.4%22.3%23.2%24.1%25.0%
NOPAT$11.4B$12.0B$12.7B$13.3B$14.0B$14.5B$15.1B$15.7B$16.3B$16.8B
− Reinvestment$2.08B$2.16B$2.24B$2.33B$2.41B$2.48B$2.56B$2.64B$2.72B$2.79B
= FCFF$9.32B$9.85B$10.4B$11.0B$11.6B$12.1B$12.5B$13.0B$13.5B$14.0B
WACC7.6%7.6%7.6%7.6%7.6%7.9%8.1%8.4%8.7%8.9%
Discount factor0.9290.8630.8020.7460.6930.6420.5940.5480.5040.463
Present value$8.66B$8.51B$8.35B$8.19B$8.03B$7.75B$7.45B$7.14B$6.82B$6.50B
ROIC (model capital)31.1%31.0%30.9%30.8%30.7%30.4%30.0%29.6%29.2%28.9%
Terminal value = NOPAT11 × (1 − g/ROIC) / (WACCmature − g) = $17.6B × (1 − 4.79% / 18.4%) / (8.93% − 4.79%) = $315B
EV = $77.4B + $315B × 0.463 = $223B

The terminal value is 65% of enterprise value. Cash flows are discounted at year end with the cumulative cost of capital of each year.

6From enterprise value to equity valueReported factModel output

From enterprise value to equity value, compared with the market value
Model valueMarket value
PV of FCFF, years 1–10PV of FCFF, years 1–10: $77.4B$77.4BPV of terminal valuePV of terminal value: $146B$146BEnterprise valueEnterprise value: $223B$223BCash & securitiesCash & securities: $822M$822MDebt incl. leasesDebt incl. leases: −$56.9B−$56.9BEquity value (model)Equity value (model): $167B$167BMarket capitalisationMarket capitalisation: $168B$168B
Enterprise value$223B
+ Cash and equivalents us-gaap:CashAndCashEquivalentsAtCarryingValue · 2026-06-30$822M
− Long-term debt us-gaap:LongTermDebtNoncurrent · 2026-06-30−$39.9B
− Finance lease liabilities us-gaap:FinanceLeaseLiability · 2025-12-31−$2.35B
− Operating lease liabilities us-gaap:OperatingLeaseLiabilityNoncurrent+OperatingLeaseLiabilityCurrent · 2026-06-30−$14.7B
= Equity value (model)$167B
÷ Diluted shares EntityCommonStockSharesOutstanding · 2026-06-30707.6 m
= Base-case model value per share$236.02
Reference price (IEX last trade) · 2026-09-24 19:59 UTC$237.10

Lease liabilities count as debt; in turn, the operating margin excludes the interest component of lease payments. Share count: shares outstanding (cover page). Data provided for free by IEX. By accessing or using IEX Historical Data, you agree to the IEX Historical Data Terms of Use.

7Scenarios and reverse DCF: what the price impliesModel output

CaseGrowth Y1Target marginModel value per sharePrice vs. case
Bear0.7%38.9%$135.31+75%
Base5.7%48.6%$236.02±0%
Bull10.7%58.4%$375.01−37%
Implied by the price5.8%48.8%$237.10±0%

Reverse DCF: holding everything else fixed, we solve for the single assumption at which the model value equals the price – the starting growth rate (5.8%), the target margin (48.8%) or the cost of capital (7.6% instead of 7.6%).

Revenue growth: history, model path and market-implied path
Historical growthModel growth pathMarket-implied path
−5%0%5%10%2022: −0.2%'222023: 10.0%'232024: 1.7%'242025: 3.7%'25Model growth path, year 1: 5.7%Model growth path, year 2: 5.6%Model growth path, year 3: 5.5%Model growth path, year 4: 5.4%Model growth path, year 5: 5.3%Model growth path, year 6: 5.2%Model growth path, year 7: 5.1%Model growth path, year 8: 5.0%Model growth path, year 9: 4.9%Model growth path, year 10: 4.8%Market-implied path, year 1: 5.8%Market-implied path, year 2: 5.7%Market-implied path, year 3: 5.6%Market-implied path, year 4: 5.4%Market-implied path, year 5: 5.3%Market-implied path, year 6: 5.2%Market-implied path, year 7: 5.1%Market-implied path, year 8: 5.0%Market-implied path, year 9: 4.9%Market-implied path, year 10: 4.8%Y1Y10

8Sensitivity: WACC × terminal growthModel output

Base-case model value per share for other costs of capital (rows: WACC of years 1–5; the shift applies to all years) and other growth after year 10 (columns). Outlined: base case. Reference price: $237.10.

WACC \ g2.8%3.3%3.8%4.3%4.8%
6.6%$222.15$241.37$264.96$294.72$333.59
7.1%$195.11$210.12$228.14$250.26$278.14
7.6%$172.47$184.40$198.46$215.33$236.02
8.1%$153.23$162.85$174.02$187.16$202.92
8.6%$136.69$144.54$153.53$163.95$176.21

Multiples vs. peers

Peer group "Consumer discretionary" within our coverage. Ratios use trailing-twelve-month figures and market values as of Sep 24, 2026. EV = market value + debt incl. leases + minorities − cash.

CompanyMarket valueImpliedgrowthBasegrowthPrice vs.base caseEV/EBITDAP/EP/SEBIT-marginGrowthlast FY
Tesla $1.34T–8.5%+1,322%133.5x351.8x12.9x 4.2%−2.9%
Home Depot $291B3.7%2.0%+8%14.3x20.5x1.7x 12.4%3.2%
McDonald's $168B5.8%5.7%±0%16.9x19.1x6.1x 46.2%3.7%
Nike $53.4B−3.8%0.0%−12%11.4x17.2x1.2x 9.1%0.2%
Lowe's $106B−1.1%2.1%−15%11.3x15.9x1.2x 11.4%3.1%
Peer median−1.1%2.1%12.8x18.8x1.4x10.2%1.7%

Median excludes McDonald's. "n/m": negative or not meaningful.

What management says

Short, attributed excerpts from the company's own latest earnings release (SEC Form 8-K, Exhibit 99.1). Quotes are reproduced verbatim; they are management's statements, not ours.

McDONALD'S REPORTS SECOND QUARTER 2026 RESULTS
Earnings release · Form 8-K · filed Aug 4, 2026 · Document at the SEC

“This quarter McDonald’s delivered positive comparable sales growth across every segment and acted decisively to strengthen execution as we prime McDonald’s for the next era of long-term growth”

— Chris Kempczinski, Chairman and CEO

Competitors and their recent moves

Notable filings by peers in the last 120 days (SEC Form 8-K items such as acquisitions, material agreements, restructurings, leadership changes and results).

  • Sep 16, 2026 · Nike
    Board or executive changeRegulation FD disclosure · 8-K
  • Sep 10, 2026 · Nike
    Board or executive change · 8-K
  • Sep 2, 2026 · Lowe's
    Board or executive change · 8-K
  • Aug 21, 2026 · Home Depot
    Board or executive change · 8-K
  • Aug 19, 2026 · Lowe's
    Quarterly or annual results · 8-K
  • Aug 18, 2026 · Home Depot
    Quarterly or annual resultsThe Home Depot Announces Second Quarter Fiscal 2026 Results; · 8-K
  • Aug 12, 2026 · Home Depot
    Board or executive changeRegulation FD disclosureThe Home Depot Announces Interim Management Plans While CEO Takes Temporary Medical Leave · 8-K
  • Aug 10, 2026 · Nike
    Board or executive change · 8-K
  • Jul 22, 2026 · Tesla
    Quarterly or annual results · 8-K
  • Jul 2, 2026 · Tesla
    Quarterly or annual resultsTesla Second Quarter 2026 Production, Deliveries & Deployments · 8-K

Analyst ratings

Consensus ratings and price targets from brokers are licensed data. We do not republish them. You can compare our model with the analyst consensus at these public sources:

External links; we are not responsible for their content.

Disclosure (MAR Art. 20)

Producer
NyxAI GmbH, Reiterkasernstraße 2a, 85049 Ingolstadt, Germany · responsible: Lars Heppert · Legal notice
Model completed
2026-09-25 14:19 UTC (automated daily run)
First published / last updated
2026-09-25 14:11 UTC / 2026-09-25 14:19 UTC
Prices used
Last regular-session trade on IEX on 2026-09-24 at 19:59:59 UTC: $237.10. This is not the official closing price of the primary exchange.
Financial data
SEC Form 10-Q, period 2026-06-30, filed 2026-08-07; balance sheet date 2026-06-30
Methodology
How the model works · steps 1–8 above
Main assumptions
rf 4.79% · ERP 4.14% · β 0.98 · WACC 7.62% → 8.93% · growth 5.7% → 4.79% · target margin 48.6% · sales/capital 0.76 · ROICterm 18.4% · scenarios: step 7, sensitivity: step 8
Nature of this information
Model-based estimate (base-case model value with a bear–bull range), computed automatically from public data with a fixed method. Not investment advice, not a recommendation to buy, sell or hold, not a price target, no investment horizon. The result depends heavily on the assumptions. Reported facts, market data, assumptions and model outputs are labelled above.
Conflicts of interest
Neither NyxAI GmbH (producer) nor its affiliated companies nor the responsible person hold positions in MCDONALDS CORP.NyxAI GmbH receives no payment from the companies covered for these pages, and they had no influence on content or results. Disclosures (as of Sep 25, 2026).

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