McDonald's Corporation (MCD) Fair Value & PE Analysis
Restaurants · NYSE
Current Price
$267.18
PE Ratio (TTM)
22.0x
Intrinsic Value
$295.41
+9.6% margin of safety
What Is McDonald's Corporation's Fair Value?
As of 2026-06-29, applying a 22.0x earnings multiple to McDonald's Corporation's (MCD) earnings per share of $12.21 yields a fair value estimate of $295.41 per share, versus a market price of $267.18.
Fair value from earnings multiples is sensitive to the multiple you choose. Across the sensitivity grid the estimate spans $241.36 to $357.33. This is a relative estimate anchored to earnings, not a statement of fact. For a cash flow based view, see the intrinsic value estimate on the DCF page.
How our PE model works · Recalculate in PE mode · MCD intrinsic value (DCF view)
Is McDonald's Corporation (MCD) Overvalued?
At $267.18, MCD trades about 9.6% below its PE-based fair value estimate, a modest discount to its earnings power, though not enough for us to call it cheap outright.
COMPETITIVE MOAT
↑Global Brand Recognition
McDonald's possesses unparalleled global brand recognition, making it a top-of-mind choice for consumers worldwide. This familiarity fosters trust and reduces perceived risk for customers.
↑Economies of Scale
Its massive scale allows McDonald's to achieve significant cost advantages in sourcing, supply chain, and operations. This efficiency translates to competitive pricing and higher margins.
↑Real Estate Holdings
McDonald's owns a substantial portfolio of prime real estate, providing a stable and appreciating asset base. This ownership offers a unique competitive advantage and revenue stream.
INVESTMENT RISKS
↓China Market Volatility
Reliance on China for growth faces headwinds from macro pressures and regional instability. This concentration exposes the company to significant geopolitical and economic risks.
↓Intense Competition
The fast-food industry is highly competitive, with numerous players vying for market share. McDonald's faces constant pressure from established rivals and emerging concepts.
↓Changing Consumer Preferences
Evolving consumer tastes towards healthier options and unique dining experiences pose a challenge. McDonald's must continually adapt its menu and offerings to remain relevant.
Base case
MCD base case PE valuation
Intrinsic Value
$295.41
Margin of safety
+9.6%
Expected annual return
+2.0%
Base case assumptions: 7.4% annual earnings growth, 22x target PE, 10% discount rate, 5 year projection. Data as of 2026-06-29.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the MCD PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for McDonald's Corporation respond.
Open PE Calculator for MCDCompany Overview
McDonald's Corporation operates and licenses its renowned fast-food chain worldwide, with a significant presence in both the United States and international markets. Their comprehensive menu offers classic items like hamburgers and cheeseburgers, a variety of chicken options including sandwiches and nuggets, alongside lighter choices such as wraps, french fries, and salads. For breakfast, patrons can select from offerings like biscuit and bagel sandwiches, breakfast burritos, and hotcakes. Additionally, the company provides oatmeal, an assortment of desserts including milkshakes, sundaes, and soft-serve ice cream, plus a selection of baked goods. A wide array of soft drinks, coffee, and other beverages completes their offering. By December 31, 2021, the corporation's global network encompassed 40,031 establishments. McDonald's Corporation, founded in 1940, has its main corporate office located in Chicago, Illinois.
Financial Metrics — MCD PE Stock Valuation Data
PE Ratio (TTM)
22.0x
PEG Ratio
3.21
Earnings Yield
4.57%
ROE (TTM)
-433.9%
Revenue/Share (TTM)
$38.62
Dividend Yield
2.75%
Debt/Equity
n/m
Frequently Asked Questions
What is the PE ratio of MCD?
The trailing twelve-month PE ratio of MCD reflects how much investors pay per dollar of McDonald's Corporation's earnings. This metric is most useful when compared to Restaurants peers and the company's own historical range.
Is MCD overvalued based on PE ratio?
MCD's PE of 22.0x combined with a PEG ratio of 3.21 provides a growth-adjusted perspective. A PEG above 2.0 suggests MCD may be richly valued even accounting for growth. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Restaurants, a DCF analysis may be more appropriate.
How do I value MCD stock using PE ratio?
To value McDonald's Corporation using PE: (1) Compare the current PE (22.0x) against the Restaurants median to assess relative pricing, (2) check the PEG ratio (3.21) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of MCD?
MCD's PEG ratio is 3.21, calculated by dividing the PE ratio (22.0x) by the expected earnings growth rate. A PEG above 2.0 often signals the stock is priced aggressively relative to its growth trajectory. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for MCD stock valuation?
PE ratio gives a quick relative read — how MCD is priced versus Restaurants peers. DCF provides an absolute value based on projected free cash flows. For the most reliable valuation, use PE as a quick comparability screen and DCF for a deeper fundamental analysis. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See MCD DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Consumer Cyclical valuationsP/E and DCF value MCD with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-06-29. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.