Business Description
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.
Business History
Generated: Jun 27, 2026 3:14amPrice Overview
Last updated: Jun 27, 2026 3:12am (4h ago)Price History (1 Year)
Revenue & Net Income Trend
| Period | Revenue | Net Income | Net Margin | YoY/QoQ |
|---|
Key Metrics
EPS (Diluted): 12.00
Total Equity: -$1.79B
Shares: 716,400,000
Total Debt: $39.97B
Cash: $774.00M
EBITDA: $14.64B
Total Debt: $39.97B
Cash: $774.00M
Revenue: $26.89B
Revenue: $26.89B
Revenue: $26.89B
Total Equity: -$1.79B
Tax Rate: 21.4%
Equity: -$1.79B
Total Debt: $39.97B
Cash: $774.00M
Current Liabilities: $4.36B
Long-Term Debt: $39.97B
Total Debt: $39.97B
Total Equity: -$1.79B
Shares: 716,400,000
Shares: 716,400,000
CapEx: -$3.37B
Shares: 716,400,000
Stock Price: $269.76
Net Income: $8.56B
Industry Benchmarks
Advanced Analysis Forensic deep-dive · three lenses
McDonald's profile is classic mature compounder: revenue grew from 23.2B in 2021 to 26.9B in 2025 (about 3.7% CAGR), but operating margin sits at a remarkable 46.1% and gross margin at 57.4%, reflecting the franchise/royalty model. Net income of 8.56B and FCF of 7.19B in 2025 are within a few percent of each other, and OCF/NI of 1.18x with accruals at -2.6% of assets indicates earnings are backed by cash, not accounting estimates. Beneish M of -2.61 and Altman Z of 4.66 corroborate clean books.
Verify before trusting this (5)
- Same-store sales trajectory by geography (US vs international developmental licensed markets) to confirm the 3.7% revenue CAGR is not masking volume declines
- Debt maturity ladder and weighted-average coupon on the ~39B net debt to assess refinancing risk
- Franchisee health metrics (cash flow, store closures, royalty deferrals) given consumer pressure on QSR traffic
- Capex split between maintenance and new-unit/tech investment to confirm reported FCF is not under-investing in the system
- Pension and operating lease obligations not captured in the net debt figure
The e2e composite pegs fair value at $189.24 against a $270 price - roughly a 30% premium, or put inversely, the stock would need to fall ~30% to meet the model. That's a meaningful gap, and it's directionally corroborated by the bear's '15%+ above DCF' comment. Earnings quality is high (no haircut needed) and the business is genuinely Strong (quality 83), which justifies a premium to a generic DCF - but not an unlimited one. A franchise/royalty model at 46% op margins probably deserves a 15-20% premium to a mechanical DCF; ~30-40% is stretching it.
Verify before trusting this (5)
- Franchisee profitability trends and any required corporate reinvestment/rebates
- US same-store-sales trajectory and traffic vs ticket split
- Guidance on G&A and tech spend that could pressure margins
- Refinancing schedule and weighted-avg interest cost on the $39B debt
- Any one-off gains inflating the high-quality earnings score
MCD sits in the calmest possible spot on the sentiment map: a neutral macro tape (VIX 18, S&P only 3.4% off highs) hitting a 0.41-beta defensive franchise with a durable platform-monopoly narrative. The story is not running hot (intensity moderate, cult low) but it is not cracking either - it is the textbook 'sleep-well-at-night' bid that gets neither punished in mild risk-off nor chased in risk-on. News flow is benign and operational (China IDL, dirty soda mainstreaming, modest single-day bounces and dips) with nothing narrative-breaking. Analyst tone is constructive (36 Buys vs 1 Sell, target $347 vs $270) but stale - zero revisions this month, which signals attention has drifted elsewhere rather than tone turning. The mild divergence worth noting: analysts still carry a 29% upside target while the live narrative concedes the stock trades 42% above DCF on 'safety premium' - that gap is a latent headwind if rates stay sticky at 4.38% and the safety bid gets re-rated, but there is no active catalyst pressing it today. Net: the pressure on MCD right now is close to zero, with a faint negative tilt from higher-for-longer rates compressing premium-multiple defensives and a faint positive from the durable narrative and constructive (if quiet) sell-side posture.
Verify before trusting this (4)
- Any downward target revisions or downgrades that would crack the stale-but-positive sell-side floor
- 10y yield breaking above 4.5% - would directly pressure premium defensive multiples
- China comps / IDL print - currently the most exposed narrative pressure point
- Rotation signal: if risk-on resumes, defensives like MCD typically underperform and lose passive bid
Deep Analysis
Pre-flight intelligence scans the company first, then routes to the right analytical methods.
Income Statement (Annual)
Last updated: Jun 27, 2026 3:15am (4h ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $23.2B | $23.2B | $25.5B | $25.9B | $26.9B |
| Cost of Revenue | $10.6B | $10.0B | $10.9B | $11.2B | $11.5B |
| Gross Profit | $12.6B | $13.2B | $14.6B | $14.7B | $15.4B |
| Operating Expenses | $2.2B | $3.8B | $2.9B | $3.0B | $3.0B |
| Operating Income | $10.4B | $9.4B | $11.6B | $11.7B | $12.4B |
| Net Income | $7.5B | $6.2B | $8.5B | $8.2B | $8.6B |
| EBITDA | $12.2B | $10.9B | $13.9B | $13.9B | $14.6B |
| EPS | $10.11 | $8.39 | $11.63 | $11.45 | $12.00 |
| EPS (Diluted) | — | — | — | — | — |
Balance Sheet (Annual)
Last updated: Jun 27, 2026 3:12am (4h ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Cash & Equivalents | $4.7B | $2.6B | $4.6B | $1.1B | $774.0M |
| Total Current Assets | $7.1B | $5.4B | $8.0B | $4.6B | $4.2B |
| Total Assets | $53.9B | $50.4B | $56.1B | $55.2B | $59.5B |
| Current Liabilities | $4.0B | $3.8B | $6.9B | $3.9B | $4.4B |
| Long-Term Debt | $35.6B | $35.9B | $37.2B | $38.4B | $40.0B |
| Total Liabilities | $58.5B | $56.4B | $60.9B | $59.0B | $61.3B |
| Total Equity | -$4.6B | -$6.0B | -$4.7B | -$3.8B | -$1.8B |
| Retained Earnings | $57.5B | $59.5B | $63.5B | $66.8B | $70.3B |
Cash Flow (Annual)
Last updated: Jun 24, 2026 5:53pm (2d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Operating Cash Flow | $9.1B | $7.4B | $9.6B | $9.4B | $10.6B |
| Capital Expenditure | -$2.0B | -$1.9B | -$2.4B | -$2.8B | -$3.4B |
| Free Cash Flow | $7.1B | $5.5B | $7.3B | $6.7B | $7.2B |
| Acquisitions (net) | -$178.0M | -$322.2M | -$246.0M | -$2.2B | $244.0M |
| Debt Repayment | — | — | — | — | — |
| Dividends Paid | — | — | — | — | — |
| Stock Buybacks | -$845.5M | -$3.9B | -$3.1B | -$2.8B | -$2.1B |
| Net Change in Cash | $1.3B | -$2.1B | $2.0B | -$3.5B | -$311.0M |
Analyst Estimates (Annual)
Last updated: Jun 27, 2026 3:12am (4h ago)| Metric | 2027 | 2028 | 2029 | 2030 |
|---|---|---|---|---|
| Revenue |
$30.1B $29.4B – $30.8B
|
$31.6B $31.6B – $31.7B
|
$32.7B $31.7B – $33.4B
|
$33.8B $32.9B – $34.6B
|
| EBITDA |
$15.8B $15.4B – $16.1B
|
$16.6B $16.5B – $16.6B
|
$17.1B $16.6B – $17.5B
|
$17.7B $17.2B – $18.1B
|
| Net Income |
$10.1B $10.0B – $10.3B
|
$10.4B $10.3B – $11.4B
|
$11.9B $11.4B – $12.2B
|
$12.4B $12.0B – $12.8B
|
| EPS | — | — | — | — |
Growth Trends (YoY %)
Last updated: Jun 27, 2026 3:15am (4h ago)| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue Growth | -0.2% | +10.0% | +1.7% | +3.7% |
| Gross Profit Growth | +5.0% | +10.3% | +1.0% | +4.9% |
| Operating Income Growth | -9.5% | +24.3% | +0.6% | +5.8% |
| Net Income Growth | -18.1% | +37.1% | -2.9% | +4.1% |
| EBITDA Growth | -10.5% | +27.1% | +0.6% | +4.9% |
Insider Trading (Recent)
Last updated: Jun 27, 2026 3:15am (4h ago)All SEC Form 4 codes
- P Purchase
- Open-market or private purchase of shares.
- S Sale
- Open-market or private sale of shares.
- A Award / grant
- Grant or award of securities (RSUs, options, etc.) under Rule 16b-3.
- D Return to issuer
- Securities disposed back to the company under Rule 16b-3.
- F In-kind (tax)
- Shares withheld or delivered to pay the option-exercise price or tax — not an open-market sale.
- I Discretionary
- Discretionary transaction under an employee plan — Rule 16b-3(f).
- M Option exercise
- Exercise or conversion of a derivative (option/RSU) into shares — exempt.
- C Conversion
- Conversion of a derivative security into the underlying shares.
- E Short expiration
- Expiration of a short derivative position.
- H Long expiration
- Expiration or cancellation of a long derivative position with value received.
- O OTM exercise
- Exercise of an out-of-the-money derivative.
- X ITM exercise
- Exercise of an in-the-money or at-the-money derivative.
- G Gift
- Bona fide gift of securities.
- L Small acquisition
- Small acquisition under Rule 16a-6.
- W Inheritance
- Acquisition or disposition by will or the laws of descent.
- Z Voting trust
- Deposit into or withdrawal from a voting trust.
- J Other
- Other acquisition or disposition (explained in a Form 4 footnote).
- K Equity swap
- Transaction in an equity swap or similar instrument.
- U Tender / buyout
- Disposition via tender of shares in a change-of-control transaction.
Compensation-plan codes (A, D, F, M) are routine and rarely directional. Open-market P (buy) and S (sale) carry the most signal.
| Date | Insider | Type | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-06-10 | Erlinger Joseph M. | M-Exempt | 5,252.00 | $157.79 | $828,713 |
| 2026-06-10 | Erlinger Joseph M. | M-Exempt | 5,252.00 | $157.79 | $828,713 |
| 2026-06-10 | Erlinger Joseph M. | S-Sale | 5,252.00 | $284.32 | $1.5M |
| 2026-05-28 | Ralls-Morrison Desiree | S-Sale | 2,763.00 | $278.36 | $769,109 |
| 2026-05-26 | Erlinger Joseph M. | S-Sale | 333.00 | $280.11 | $93,277 |
| 2026-04-23 | Erlinger Joseph M. | S-Sale | 333.00 | $302.72 | $100,806 |
| 2026-04-10 | Erlinger Joseph M. | M-Exempt | 2,626.00 | $157.79 | $414,357 |
| 2026-04-10 | Erlinger Joseph M. | M-Exempt | 2,626.00 | $157.79 | $414,357 |
| 2026-04-10 | Erlinger Joseph M. | S-Sale | 2,626.00 | $307.00 | $806,182 |
| 2026-03-23 | Erlinger Joseph M. | S-Sale | 333.00 | $313.47 | $104,386 |
| 2026-03-18 | Baroni Dario | S-Sale | 600.00 | $323.77 | $194,262 |
| 2026-03-10 | Erlinger Joseph M. | M-Exempt | 2,626.00 | $157.79 | $414,357 |
| 2026-03-10 | Erlinger Joseph M. | M-Exempt | 2,626.00 | $157.79 | $414,357 |
| 2026-03-10 | Erlinger Joseph M. | S-Sale | 2,626.00 | $328.34 | $862,221 |
| 2026-02-20 | Ralls-Morrison Desiree | I-Discretionary | 1,518.69 | $0.00 | $0 |
| 2026-02-23 | Erlinger Joseph M. | S-Sale | 333.00 | $330.43 | $110,033 |
| 2026-02-23 | Banner Jonathan | M-Exempt | 4,600.00 | $266.20 | $1.2M |
| 2026-02-23 | Banner Jonathan | M-Exempt | 4,600.00 | $266.20 | $1.2M |
| 2026-02-23 | Banner Jonathan | S-Sale | 1,600.66 | $333.42 | $533,692 |
| 2026-02-23 | Banner Jonathan | S-Sale | 4,600.00 | $333.24 | $1.5M |
Dividend History (Last 20)
Last updated: Jun 24, 2026 5:53pm (2d ago)| Date | Dividend | Declaration | Record | Payment |
|---|---|---|---|---|
| 2026-06-02 | $1.86 | 2026-05-20 | 2026-06-02 | 2026-06-16 |
| 2026-03-03 | $1.86 | 2026-02-04 | 2026-03-03 | 2026-03-17 |
| 2025-12-01 | $1.86 | 2025-10-22 | 2025-12-01 | 2025-12-15 |
| 2025-09-02 | $1.77 | 2025-07-22 | 2025-09-02 | 2025-09-16 |
| 2025-06-02 | $1.77 | 2025-05-20 | 2025-06-02 | 2025-06-16 |
| 2025-03-03 | $1.77 | 2025-02-06 | 2025-03-03 | 2025-03-17 |
| 2024-12-02 | $1.77 | 2024-09-25 | 2024-12-02 | 2024-12-16 |
| 2024-09-03 | $1.67 | 2024-07-25 | 2024-09-03 | 2024-09-17 |
| 2024-06-03 | $1.67 | 2024-05-22 | 2024-06-03 | 2024-06-17 |
| 2024-02-29 | $1.67 | 2024-02-07 | 2024-03-01 | 2024-03-15 |
| 2023-11-30 | $1.67 | 2023-10-04 | 2023-12-01 | 2023-12-15 |
| 2023-08-31 | $1.52 | 2023-07-25 | 2023-09-01 | 2023-09-18 |
| 2023-06-02 | $1.52 | 2023-05-25 | 2023-06-05 | 2023-06-20 |
| 2023-02-28 | $1.52 | 2023-02-02 | 2023-03-01 | 2023-03-15 |
| 2022-11-30 | $1.52 | 2022-10-13 | 2022-12-01 | 2022-12-15 |
| 2022-08-31 | $1.38 | 2022-07-28 | 2022-09-01 | 2022-09-16 |
| 2022-06-03 | $1.38 | 2022-05-26 | 2022-06-06 | 2022-06-20 |
| 2022-02-28 | $1.38 | 2022-01-20 | 2022-03-01 | 2022-03-15 |
| 2021-11-30 | $1.38 | 2021-09-23 | 2021-12-01 | 2021-12-15 |
| 2021-08-31 | $1.29 | 2021-07-22 | 2021-09-01 | 2021-09-15 |
Narrative Economics
market-narrative step).
Delvantic AI Findings
Looking at the raw quarterly trajectory first: revenue went $6.49B → $6.87B → $6.39B → $5.96B → $6.84B → $7.08B → $7.01B → $6.52B over the last eight quarters. That most-recent $6.52B in Q1 2026 is a sequential decline from $7.01B and only +9.4% YoY against the easy $5.96B Q1 2025 comp — but margin compressed to 30.4% from 32.9% a year prior. Net income of $1.98B is actually *down* from $2.25B in Q2 2025 and $2.28B in Q3 2025. The "recent earnings YoY 4.1%" the momentum module cites masks a clear margin rollover: four straight quarters of declining net margin (32.9 → 32.2 → 30.9 → 30.4). For a business whose entire premium rests on franchise-royalty margin stability, that's the single most important data point in the file and nobody flagged it.
Annual numbers look fine in isolation — $26.89B revenue, $8.56B NI, $7.19B FCF, 46% operating margin — but the 5-year revenue CAGR of 3.0% ($23.22B → $26.89B) and FCF actually *shrinking* slightly confirm this is a no-growth cash cow. At $269.76 and 22x TTM earnings with 0.6% earnings CAGR, you're paying a growth multiple for a business that has not grown earnings. The synthesis calling 14.5% implied FCF growth "justified" is doing heavy lifting — FCF has gone backwards. The narrative module's $189 DCF anchor implying 42% narrative premium is, frankly, the most honest read in the stack. A 2.35% dividend yield + ~3% buyback + 0-3% organic growth gets you to a ~7-8% total return at current price, which is fine but not cheap when 10-year Treasuries yield 4%+.
The contrarian case the models underweight: McDonald's negative book equity (hence the -121 P/B) is a function of decades of buybacks funded by debt — fine in a low-rate world, problematic as the debt stack rolls at higher coupons. Cash of only $774M against an unstated but large debt load (interest coverage is the real question, and the file is silent on total debt — a serious gap). The "real estate moat" narrative is true but already 40 years priced in; it doesn't expand the multiple from here. GLP-1 demand destruction is real and underappreciated — US same-store traffic has been negative for multiple quarters at peers, and the Q1 2026 revenue miss is consistent with that. Insider activity is all sales, no opens — small in size but directionally unanimous, and the synthesis calling it "Neutral" is generous. The Market Forces module's mention of "unsustainable financial engineering" is the right instinct buried under hedging.
I dissent mildly from the "Reasonable Premium" synthesis. Reasonable for whom? At $269.76, you're paying 22x for ~3% revenue growth, decelerating margins, negative book equity, and an FCF line that hasn't grown in five years. The narrative DCF of $189 is probably too harsh (it likely under-credits the royalty stream's durability), but fair value is meaningfully below spot — I'd anchor to $220-235, implying ~15-18% downside, justified by a 18-19x multiple appropriate for a no-growth dividend compounder in a 4%+ rate regime. The quality is real; the price isn't. The decelerating quarterly margin trend is the catalyst the bulls aren't pricing — one more quarter of sub-31% net margin and the multiple compresses. I would not short it (the dividend + buyback floor is real, and narrative durability is genuinely high), but I would not own it here either. Wait for either a margin stabilization signal or a $230 handle.
GPT Critique
In reviewing the raw data, McDonald's Corporation presents a mixed picture. The company has shown a steady increase in annual revenue from $23.22 billion in 2021 to $26.89 billion in 2025, reflecting a modest revenue CAGR of 3.0%. However, this is overshadowed by margin compression. Quarterly net margins have declined from 32.9% in Q2 2025 to 30.4% in Q1 2026, and net income appears to have peaked, with the recent quarters showing a downward trend. The free cash flow also hasn't shown growth, shrinking slightly, which is concerning for a company valued on its cash-generative abilities. The negative book equity highlighted by the P/B ratio of -121.74 further complicates the valuation, as it suggests financial engineering through buybacks funded by debt, a strategy that could be more costly in a high-interest-rate environment.
I align with Opus's critical view on McDonald's valuation. Opus argues that the premium valuation at 22x TTM earnings is not justified given the negligible earnings growth (0.6% CAGR) and decelerating margins. I agree with Opus's assessment that the narrative premium over the DCF anchor of $189 is excessive, considering the company's operational metrics. The revenue growth is limited, and the margin decline is a red flag, especially when the market expects stable high margins from McDonald's franchise model. The FCF quality is good, but it's not expanding, which is concerning for sustaining long-term shareholder returns.
Where I diverge slightly from Opus is on the degree of overvaluation. Opus suggests a fair value range of $220-235, citing a 15-18% downside. While I concur that the stock is overvalued, I believe the fair value might be slightly higher, around $240, given the durability and global strength of the brand, which might support a higher multiple than traditional QSR peers. Nonetheless, I agree that the current price at $269.76 includes a significant narrative premium that is not backed by the recent financial performance.
A careful skeptic might argue that McDonald's has a proven track record of navigating economic cycles and that its franchise model and global footprint provide a buffer against current margin pressures. They might also point to the company's ability to adjust pricing and menu offerings to maintain profitability, arguing that the brand's pricing power in inflationary environments is underappreciated. However, these factors seem already priced in, and the decelerating margins remain a concern that the market should not overlook.