As of December 15, 2025, Mcdonald's Corp's estimated intrinsic value ranges from $125.31 to $351.58 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $351.58 | +11.0% |
| Discounted Cash Flow (5Y) | $351.57 | +11.0% |
| Dividend Discount Model (Multi-Stage) | $262.11 | -17.2% |
| Dividend Discount Model (Stable) | $282.98 | -10.7% |
| Earnings Power Value | $125.31 | -60.4% |
Is Mcdonald's Corp (MCD) undervalued or overvalued?
With the current market price at $316.72, the stock appears to be fairly valued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Mcdonald's Corp's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.67 | 0.69 |
| Cost of equity | 7.0% | 8.7% |
| Cost of debt | 4.0% | 4.8% |
| Tax rate | 20.1% | 20.7% |
| Debt/Equity ratio | 0.18 | 0.18 |
| After-tax WACC | 6.4% | 8.0% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $352 | $289,243M | 85.6% |
| 10-Year Growth | $352 | $289,249M | 71.0% |
| 5-Year EBITDA | $287 | $243,292M | 82.9% |
| 10-Year EBITDA | $297 | $250,183M | 66.5% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $9,083M |
| Discount Rate (WACC) | 8.0% - 6.4% |
| Enterprise Value | $114,060M - $142,157M |
| Net Debt | $38,870M |
| Equity Value | $75,190M - $103,287M |
| Outstanding Shares | 712M |
| Fair Value | $106 - $145 |
| Selected Fair Value | $125.31 |
| Metric | Value |
|---|---|
| Market Capitalization | $225552M |
| Enterprise Value | $264422M |
| Trailing P/E | 26.80 |
| Forward P/E | 26.30 |
| Trailing EV/EBITDA | 15.55 |
| Current Dividend Yield | 224.34% |
| Dividend Growth Rate (5Y) | 6.73% |
| Debt-to-Equity Ratio | 0.18 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $105.47 |
| Discounted Cash Flow (5Y) | 25% | $87.89 |
| Dividend Discount Model (Multi-Stage) | 20% | $52.42 |
| Dividend Discount Model (Stable) | 15% | $42.45 |
| Earnings Power Value | 10% | $12.53 |
| Weighted Average | 100% | $300.77 |
Based on our comprehensive valuation analysis, Mcdonald's Corp's intrinsic value is $300.77, which is approximately 5.0% below the current market price of $316.72.
Key investment considerations:
Given these factors, we believe Mcdonald's Corp is currently fairly valued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.