McDonald's Corporation operates and franchises McDonald's hamburger-focused restaurants in the United States, Europe, the Asia/Pacific, the Middle East, Africa, Canada, and Latin America. The company was founded in 1940 and is based in Oak Brook, Illinois.
MCD Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Mcdonalds Corp with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Mcdonalds Corp ranked in the 14th percentile in terms of potential gain offered. We should note, though, that all scenearios modelled for this stock suggest it is overvalued. In terms of the factors that were most noteworthy in this DCF analysis for MCD, they are:
The company's compound free cash flow growth rate over the past 5.77 years comes in at -0.04%; that's greater than only 19.95% of US stocks we're applying DCF forecasting to.
Mcdonalds Corp's weighted average cost of capital (WACC) is 7%; for context, that number is higher than just 17.33% of tickers in our DCF set.
The company's cost of debt, derived from its interest coverage, tax rate, and market capitalization, is greater than just 23.66% of stocks in its sector (Consumer Cyclical).
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
Want more companies with a valuation profile/forecast similar to that of Mcdonalds Corp? See BBGI, RL, GOLF, NWSA, and RACE.
McDonald's (NYSE: MCD) popular all-day breakfast options were taken off the menu back in March to help simplify and speed up the ordering times amid the coronavirus pandemic. Fast-forward six months and McDonald's still has not brought all-day breakfast back to the menu, even though some other items that were also removed at the time are now available again. After years of consumers clamoring for the ability to order a McGriddle at 4 p.m., McDonald's launched the all-day breakfast menu in 2015 to great fanfare and it snapped a two-year slide in same-store sales.
DOW UPDATE The Dow Jones Industrial Average is climbing Wednesday morning with shares of Nike and Johnson & Johnson leading the way for the index. Shares of Nike (NKE) and Johnson & Johnson (JNJ) have contributed to the blue-chip gauge's intraday rally, as the Dow (DJIA) was most recently trading 9 points (0.
DOW UPDATE Shares of Nike and Boeing are trading higher Wednesday morning, lifting the Dow Jones Industrial Average into positive territory. The Dow (DJIA) is trading 135 points higher (0.5%), as shares of Nike (NKE) and Boeing (BA) have contributed about one third of the blue-chip gauge's intraday rally.