McDonald's Corporation Stock Price Targets
Comprehensive analysis of short, mid, and long-term price targets for McDonald's Corporation (MCD).
Give me a comprehensive price target analysis for McDonald's Corporation (MCD).
Price Target Analysis for McDonald's Corporation (MCD)
| Level | Price | Justification & Key Drivers |
|---|---|---|
| Low Target | $260.00 | Represents a conservative downside scenario based on historical support levels and valuation metrics. |
| Median Target | $335.00 | The consensus median estimate by analysts, supported by current earnings growth and market positioning. |
| High Target | $373.00 | Reflects optimistic growth assumptions, potential earnings expansions, and favorable market sentiment. |
Executive Summary
McDonald's maintains a resilient position in the fast-food industry with a robust financial profile and positive earnings momentum. The stock is poised for moderate upside, aligning with analyst targets and technical indicators. Short-term volatility may present buying opportunities, with longer-term growth driven by global expansion and innovation.
Fundamental Analysis
- Valuation Metrics: Trailing PE of ~26.8 and Forward PE ~24.8 indicate a premium but justified valuation given McDonald's stable revenue streams and global market share.
- Market Cap: ~$223.5B, reflecting a large-cap status with significant market influence.
- Margins & Financial Health: Strong profit margins (
32.2%), healthy cash position ($1.88B), though high debt levels (~$55.9B debt) warrant monitoring.
Earnings Analysis
- Recent Earnings: Consistent net income (~$2.25B) and EBITDA growth indicate operational stability.
- EPS Trends: Slight upward trend (+1.4% QoQ), with current EPS around $3.14, supporting the mid-range target.
- Revisions & Sentiment: Positive revisions (+21% over 1 year), suggesting analysts remain optimistic.
- Earnings Quality: Revenue growth (~$6.84B), solid margins, and recurring revenue underpin earnings sustainability.
Technical Analysis
- Price Action: Trading near the 50-day moving average (~$310.9), indicating short-term stability.
- Momentum Indicators: RSI (~67.6) suggests slightly overbought conditions but not excessive; MACD indicates ongoing bullish momentum.
- Support/Resistance: Current price (~$313.22) aligns with recent highs, with support near ~$310.
Analyst Consensus & Price Targets
- Coverage: 27 analysts, with a median target of $335, above the current price of $313.22.
- Catalysts: Global expansion, menu innovation, digital engagement, and recovery in dine-in traffic.
Price Target Analysis (Short, Mid, Long-Term)
- Short-Term (3 months): Near-term fluctuations with a bias towards stability; potential target ~$320.
- Mid-Term (12 months): Based on earnings growth and technical momentum, targets ~$335.
- Long-Term (3+ years): Growth driven by new markets and brand strength could push prices towards ~$373.
Risks & Opportunities
- Risks: Rising commodity costs, regulatory challenges, currency exchange risks, and competitive pressures.
- Opportunities: Market expansion, digital sales growth, menu innovation, and operational efficiencies.
Investment Recommendation
- Horizon: Hold for the medium to long term.
- Rating: Buy, given the favorable growth outlook, technical momentum, and valuation.
- Expected Return: Approximately 7-15% over 12-24 months, with potential upside towards the high target.
This comprehensive analysis underscores McDonald's as a solid long-term investment with moderate near-term gains, supported by fundamental strength and technical validation.