Restaurants · NYSE
Current Price
$290.08
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on McDonald's Corporation with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
McDonald's Corporation operates and franchises McDonald's restaurants in the United States and internationally. Its restaurants offer hamburgers and cheeseburgers, chicken sandwiches and nuggets, wraps, fries, salads, oatmeal, shakes, desserts, sundaes, soft serve cones, bakery items, soft drinks, coffee, and beverages and other beverages, as well as breakfast menu, including biscuit and bagel sandwiches, breakfast burritos, hotcakes, and other sandwiches. As of December 31, 2021, the company operated 40,031 restaurants. McDonald's Corporation was founded in 1940 and is headquartered in Chicago, Illinois.
ROIC (TTM)
17.4%
ROE (TTM)
-336.9%
FCF Yield
3.49%
Based on trailing twelve-month data, MCD shows a free cash flow per share of N/A and a ROIC of 17.4%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 3.49% are important context metrics when evaluating MCD's stock valuation relative to peers.
The intrinsic value of MCD depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether MCD is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $290.08. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on McDonald's Corporation: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Restaurants industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting MCD's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For McDonald's Corporation, this means projecting how much free cash flow the Restaurants will produce over the next 5-10 years, then discounting those amounts to today's dollars. MCD's ROIC of 17.4% indicates strong capital efficiency, which supports higher growth assumptions in the DCF model.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For MCD, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
