MCD
McDonald's Corporation$331.74
Unclear
Target $340.23
Report: Mar 08, 2026Consumer Cyclical • Restaurants • Asset-Based OperatorSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$331.74+2.6%
Rec: UnclearConviction: Medium
Entry Target
$261.72
(21% below current)
Fair Value
$340.23
(3% above current)
Stop Loss
$232.39
(30% below current)
Position Size
Starter
Time Horizon
Strategic (2-3 Years)
Key Metrics
Live Snapshot
Market Data
52 Week High$341.75
52 Week Low$283.47
Avg. 3 Month Volume3.30M
Efficiency
LTM Gross Margin59.5%
LTM EBITDA Margin54.6%
LTM EBIT Margin46.4%
LTM Operating Margin46.1%
LTM ROA14.5%
LTM ROE-336.9%
LTM ROIC12.0%
LTM ROCE23.2%
Capital Structure
Market Cap (MM)$220.8B
Enterprise Value (MM)$274.8B
Shares Outstanding711.30M
Total Debt (MM)$54.81B
Cash & Equivalents (MM)$774.00M
LTM Net Debt (MM)$54.04B
LTM Net Debt/EBITDA3.7x
Growth
TTM Rev. Growth3.7%
Last 3-Yr Rev. CAGR5.1%
Last 3-Yr EBITDA CAGR10.4%
Last 3-Yr EPS CAGR12.6%
Valuation
Street Target Price$351.76
LTM EV/Revenue10.2x
LTM EV/Gross Profit17.2x
LTM EV/EBIT22.0x
LTM EV/EBITDA18.7x
LTM P/E25.8x
LTM EV/FCF37.6x
LTM P/FCF30.2x
LTM P/TB3.9x
LTM P/B-123.3x
Dividend Yield2.3%
Payout Ratio59.8%
Executive SummarySituation: Current price is $331.74 versus fair value $340.23 (2.6% expected return), and valuation confidence is stable. Debate: Bull case depends on Debt refinancing of $20.5B 2027-2030 maturities at sub-5% yields unlocks $1B+ annual interest savings given 7.9x coverage and BBB+/Baa1 ratings; validates leverage sustainability amid 92% debt-to-assets. Bear case centers on Regulatory changes to franchise model via NLRB Joint Employer rule reclassifying franchisor liability, impairing 95% franchised cash flows from royalties/rents. Conclusion: Recommendation is Unclear; maintain no position until reliability and catalyst evidence improve.
Bull Case
Franchise model yields 46.1% operating margins and 27.2% FCF margins with 123% cash conversion, supporting $7.1B annual dividends at 2.2% yield; 45,356-unit portfolio at $34.7B liquidation value covers 64% of $54.0B net debt; loyalty at 210M users drives 26x frequency vs baseline.
Bear Case
ROIC 12.0% trails peer median 16.8% amid peak CapEx cycle (12.0% of revenue >3.7% growth); negative $1.8B equity and 92.1% debt-to-assets with $0.00 NLV expose to refinancing at 2027-2030 maturities totaling $20.5B; GLP-1 drugs and 20% cumulative pricing erode low-income traffic per external checks.
Key Catalysts
Mid-Term (6-18 months)Impact: High
Debt refinancing of $20.5B 2027-2030 maturities at sub-5% yields unlocks $1B+ annual interest savings given 7.9x coverage and BBB+/Baa1 rati...
Near-Term (0-6 months)Impact: Moderate
Sale-leaseback of non-core real estate from $42.8B PP&E portfolio monetizes $2-3B equity value at 1.8-2.5M/unit comps, deleveraging net debt...
Long-Term (18+ months)Impact: Moderate
Recent Q4 2025 comps over 5.5% and 2,275 openings validate asset utilization amid GLP-1 concerns, with $3.7B 2026 CapEx signaling near-term...
Primary Risks
Concern: Medium
Regulatory changes to franchise model via NLRB Joint Employer rule reclassifying franchisor liability, impairing 95% franchised cash flows f...
Concern: High
Technological obsolescence of drive-thru/digital assets as GLP-1 reduces visits, collapsing 3.1% comps and $15.0B restaurant margins.
Concern: Medium
Stewardship is strong via 91% independent board with asset experts (Marriott CEO Capuano, Kimberly-Clark CEO Hsu) and full ERM oversight; ow...
Recent Activity
2024-10-23Analyst Target
-5.12%Firm: Evercore ISI Analyst: David Palmer Price Target: $340.00 Price When Posted: $314.69 Implied Upside: +8.0%
Valuation Table
9.8/10Decision Grade
Scenario Range
$232
Bear
$312
Base
$382
Bull
$332