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:
Below please find a table outlining a discounted cash flow forecast for MCD, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Mcdonalds Corp ranked in the 27th percentile in terms of potential gain offered. Our DCF analysis suggests the stock is overvalued by about 55.33%. The most interesting components of our discounted cash flow analysis for Mcdonalds Corp ended up being:
Mcdonalds Corp's weighted average cost of capital (WACC) is 7%; for context, that number is higher than merely 23.33% of tickers in our DCF set.
MCD's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than merely 23.33% of tickers in our DCF set.
Relative to other stocks in its sector (Consumer Cyclical), Mcdonalds Corp has a reliance on debt greater than just 24.06% of them.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
AAP, SON, APTV, HLT, and BFAM can be thought of as valuation peers to MCD, in the sense that they are in the Consumer Cyclical sector and have a similar price forecast based on DCF valuation.
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