MCD:NYSEMcDonald's Corporation Analysis
Data as of 2026-05-20 - not real-time
$280.80
Latest Price
3/10Risk
Risk Level: Low
Executive Summary
McDonald’s shares are trading at $280.8, comfortably below the 20‑day (≈285.4), 50‑day (≈301.1) and 200‑day (≈308.3) simple moving averages, signaling a short‑term technical weakness. However, the RSI of 38 points to near‑oversold conditions and the MACD has turned bullish (line above signal, positive histogram), suggesting a potential bottom‑fade. The stock sits just above the identified support at $271.98 and below the next resistance at $304.9, with volume trending upward, which could fuel a modest bounce ahead of the Q1 earnings release (consensus $2.75 EPS, 8.9% revenue growth).
Fundamentally, the company delivers strong profitability (gross margin ~57%, operating margin ~44%) and solid cash generation (free cash flow ~$5.95 bn). The dividend yield of 2.65% with a 60% payout ratio remains sustainable, while revenue growth of ~9% and a forward PE of 19.7 indicate a healthy earnings outlook. Yet the DCF fair‑value estimate of $85.7 is dramatically lower than the current price, flagging the stock as significantly overvalued despite a consensus “Buy” from analysts.
Fundamentally, the company delivers strong profitability (gross margin ~57%, operating margin ~44%) and solid cash generation (free cash flow ~$5.95 bn). The dividend yield of 2.65% with a 60% payout ratio remains sustainable, while revenue growth of ~9% and a forward PE of 19.7 indicate a healthy earnings outlook. Yet the DCF fair‑value estimate of $85.7 is dramatically lower than the current price, flagging the stock as significantly overvalued despite a consensus “Buy” from analysts.
Market Outlook
Short Term
< 1 yearNeutral
Model confidence: 7/10
Key Factors
- Price below short‑term SMAs indicating bearish bias
- Bullish MACD crossover and RSI near oversold suggest limited upside
- Upcoming earnings could trigger a short‑term bounce
Medium Term
1–3 yearsPositive
Model confidence: 8/10
Key Factors
- Strong operating margins and free cash flow support dividend sustainability
- Revenue growth ~9% and forward PE under 20 imply reasonable valuation relative to peers
- Analyst consensus “Buy” with median price target ~327.5
Long Term
> 3 yearsNeutral
Model confidence: 7/10
Key Factors
- Brand longevity and expanding data‑driven real estate/AI initiatives
- Dividend yield and payout ratio provide steady income
- Significant overvaluation relative to DCF fair value limits upside potential
Key Metrics & Analysis
Financial Health
Revenue Growth9.40%
Profit Margin31.62%
P/E Ratio23.1
ROA13.56%
P/B Ratio-155.1
Op. Cash Flow$10.5B
Free Cash Flow$6.0B
Technical Analysis
TrendBearish
RSI38.5
Support$271.98
Resistance$304.89
MA 20$285.37
MA 50$301.05
MA 200$308.30
MACDBullish
VolumeIncreasing
Fear & Greed Index89.18
Valuation
Fair Value$85.65
Target Price$330.00
Upside/Downside17.52%
GradeOvervalued
TypeBlend
Dividend Yield2.65%
Risk Assessment
Beta0.12
Volatility19.50%
Sector RiskMedium
Reg. RiskLow
Geo RiskMedium
Currency RiskLow
Liquidity RiskLow
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This analysis may contain inaccuracies and is provided for informational and research purposes only. It is not personal investment advice, a recommendation, or an instruction to buy, sell, or hold any asset.