McDonald's (MCD)
Market Price (3/15/2026): $326.38 | Market Cap: $232.7 BilSector: Consumer Discretionary | Industry: Restaurants
McDonald's (MCD)
Market Price (3/15/2026): $326.38Market Cap: $232.7 BilSector: Consumer DiscretionaryIndustry: Restaurants
Investment Highlights Why It Matters Detailed financial logic regarding cash flow yields vs trend-riding momentum.
| Attractive yieldTotal YieldTotal Yield = Earnings Yield + Dividend Yield, Earnings Yield = Net Income / Market Cap Dividend Yield = Total Dividends / Market Cap is 5.8%, Dividend Yield is 2.2% | Trading close to highsDist 52W High is -4.3%, Dist 3Y High is -4.3% | Expensive valuation multiplesP/SPrice/Sales ratio is 8.9x |
| Attractive operating marginsOp Mgn LTMOperating Margin = Operating Income / Revenue Reflects profitability before taxes and before impact of capital structure (interest payments). is 46% | Weak multi-year price returns2Y Excs Rtn is -15%, 3Y Excs Rtn is -38% | |
| Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 40%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 28%, CFO LTM is 10 Bil, FCF LTM is 7.4 Bil | ||
| Low stock price volatilityVol 12M is 17% | ||
| Megatrend and thematic driversMegatrends include E-commerce & Digital Retail, Vegan & Alternative Foods, and Experience Economy & Premiumization. Themes include Direct-to-Consumer Brands, Show more. |
| Attractive yieldTotal YieldTotal Yield = Earnings Yield + Dividend Yield, Earnings Yield = Net Income / Market Cap Dividend Yield = Total Dividends / Market Cap is 5.8%, Dividend Yield is 2.2% |
| Attractive operating marginsOp Mgn LTMOperating Margin = Operating Income / Revenue Reflects profitability before taxes and before impact of capital structure (interest payments). is 46% |
| Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 40%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 28%, CFO LTM is 10 Bil, FCF LTM is 7.4 Bil |
| Low stock price volatilityVol 12M is 17% |
| Megatrend and thematic driversMegatrends include E-commerce & Digital Retail, Vegan & Alternative Foods, and Experience Economy & Premiumization. Themes include Direct-to-Consumer Brands, Show more. |
| Trading close to highsDist 52W High is -4.3%, Dist 3Y High is -4.3% |
| Weak multi-year price returns2Y Excs Rtn is -15%, 3Y Excs Rtn is -38% |
| Expensive valuation multiplesP/SPrice/Sales ratio is 8.9x |
Qualitative Assessment
AI Analysis | Feedback
McDonald's (MCD) stock has gained about 5% since 11/30/2025 because of the following key factors:
1. Strong Fourth Quarter 2025 Financial Performance: McDonald's reported better-than-expected results for Q4 2025, with diluted earnings per share (EPS) of $3.12, surpassing analyst estimates of $3.05. Consolidated revenues increased 9.7% year-over-year to $7.01 billion, exceeding the anticipated $6.81 billion, driven by a 5.7% increase in global comparable sales and a 6.8% rise in U.S. comparable sales.
2. Robust Growth Strategy and Digital Engagement: The company demonstrated strong momentum with nearly $140 billion in 2025 system-wide sales and announced plans to accelerate unit growth with approximately 2,600 new restaurant openings targeted for 2026. McDonald's also highlighted the success of its digital and loyalty programs, reaching nearly 210 million active loyalty users by the end of 2025, which contributes to increased visit frequency and sales.
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1. Strong Fourth Quarter 2025 Financial Performance: McDonald's reported better-than-expected results for Q4 2025, with diluted earnings per share (EPS) of $3.12, surpassing analyst estimates of $3.05. Consolidated revenues increased 9.7% year-over-year to $7.01 billion, exceeding the anticipated $6.81 billion, driven by a 5.7% increase in global comparable sales and a 6.8% rise in U.S. comparable sales.
2. Robust Growth Strategy and Digital Engagement: The company demonstrated strong momentum with nearly $140 billion in 2025 system-wide sales and announced plans to accelerate unit growth with approximately 2,600 new restaurant openings targeted for 2026. McDonald's also highlighted the success of its digital and loyalty programs, reaching nearly 210 million active loyalty users by the end of 2025, which contributes to increased visit frequency and sales.
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Stock Movement Drivers
Fundamental Drivers
The 5.9% change in MCD stock from 11/30/2025 to 3/13/2026 was primarily driven by a 5.9% change in the company's P/E Multiple.| (LTM values as of) | 11302025 | 3132026 | Change |
|---|---|---|---|
| Stock Price ($) | 308.24 | 326.46 | 5.9% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 26,263 | 26,263 | 0.0% |
| Net Income Margin (%) | 32.0% | 32.0% | 0.0% |
| P/E Multiple | 26.1 | 27.7 | 5.9% |
| Shares Outstanding (Mil) | 713 | 713 | 0.0% |
| Cumulative Contribution | 5.9% |
Market Drivers
11/30/2025 to 3/13/2026| Return | Correlation | |
|---|---|---|
| MCD | 5.9% | |
| Market (SPY) | -3.1% | -2.6% |
| Sector (XLY) | -6.2% | 17.6% |
Fundamental Drivers
The 5.9% change in MCD stock from 8/31/2025 to 3/13/2026 was primarily driven by a 5.4% change in the company's P/E Multiple.| (LTM values as of) | 8312025 | 3132026 | Change |
|---|---|---|---|
| Stock Price ($) | 308.19 | 326.46 | 5.9% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 26,060 | 26,263 | 0.8% |
| Net Income Margin (%) | 32.2% | 32.0% | -0.5% |
| P/E Multiple | 26.2 | 27.7 | 5.4% |
| Shares Outstanding (Mil) | 714 | 713 | 0.2% |
| Cumulative Contribution | 5.9% |
Market Drivers
8/31/2025 to 3/13/2026| Return | Correlation | |
|---|---|---|
| MCD | 5.9% | |
| Market (SPY) | 3.0% | -0.1% |
| Sector (XLY) | -4.2% | 17.2% |
Fundamental Drivers
The 9.0% change in MCD stock from 2/28/2025 to 3/13/2026 was primarily driven by a 6.0% change in the company's P/E Multiple.| (LTM values as of) | 2282025 | 3132026 | Change |
|---|---|---|---|
| Stock Price ($) | 299.63 | 326.46 | 9.0% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 25,921 | 26,263 | 1.3% |
| Net Income Margin (%) | 31.7% | 32.0% | 1.0% |
| P/E Multiple | 26.1 | 27.7 | 6.0% |
| Shares Outstanding (Mil) | 716 | 713 | 0.4% |
| Cumulative Contribution | 9.0% |
Market Drivers
2/28/2025 to 3/13/2026| Return | Correlation | |
|---|---|---|
| MCD | 9.0% | |
| Market (SPY) | 12.4% | 17.7% |
| Sector (XLY) | 3.4% | 19.8% |
Fundamental Drivers
The 32.6% change in MCD stock from 2/28/2023 to 3/13/2026 was primarily driven by a 20.2% change in the company's Net Income Margin (%).| (LTM values as of) | 2282023 | 3132026 | Change |
|---|---|---|---|
| Stock Price ($) | 246.26 | 326.46 | 32.6% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 23,182 | 26,263 | 13.3% |
| Net Income Margin (%) | 26.6% | 32.0% | 20.2% |
| P/E Multiple | 29.1 | 27.7 | -5.1% |
| Shares Outstanding (Mil) | 731 | 713 | 2.6% |
| Cumulative Contribution | 32.6% |
Market Drivers
2/28/2023 to 3/13/2026| Return | Correlation | |
|---|---|---|
| MCD | 32.6% | |
| Market (SPY) | 73.4% | 24.0% |
| Sector (XLY) | 56.0% | 25.0% |
Price Returns Compared
| 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | Total [1] | |
|---|---|---|---|---|---|---|---|
| Returns | |||||||
| MCD Return | 28% | 1% | 15% | 0% | 8% | 7% | 71% |
| Peers Return | 17% | -5% | 26% | 14% | -5% | 5% | 59% |
| S&P 500 Return | 27% | -19% | 24% | 23% | 16% | -1% | 80% |
Monthly Win Rates [3] | |||||||
| MCD Win Rate | 58% | 50% | 50% | 42% | 50% | 67% | |
| Peers Win Rate | 52% | 42% | 62% | 57% | 43% | 67% | |
| S&P 500 Win Rate | 75% | 42% | 67% | 75% | 67% | 33% | |
Max Drawdowns [4] | |||||||
| MCD Max Drawdown | -4% | -17% | -5% | -16% | -4% | -2% | |
| Peers Max Drawdown | -7% | -27% | -5% | -10% | -19% | -3% | |
| S&P 500 Max Drawdown | -1% | -25% | -1% | -2% | -15% | -2% | |
[1] Cumulative total returns since the beginning of 2021
[2] Peers: SBUX, CMG, YUM, QSR, TXRH. See MCD Returns vs. Peers.
[3] Win Rate = % of calendar months in which monthly returns were positive
[4] Max drawdown represents maximum peak-to-trough decline within a year
[5] 2026 data is for the year up to 3/13/2026 (YTD)
How Low Can It Go
| Event | MCD | S&P 500 |
|---|---|---|
| 2022 Inflation Shock | ||
| % Loss | -17.7% | -25.4% |
| % Gain to Breakeven | 21.5% | 34.1% |
| Time to Breakeven | 232 days | 464 days |
| 2020 Covid Pandemic | ||
| % Loss | -37.0% | -33.9% |
| % Gain to Breakeven | 58.6% | 51.3% |
| Time to Breakeven | 172 days | 148 days |
| 2018 Correction | ||
| % Loss | -16.9% | -19.8% |
| % Gain to Breakeven | 20.3% | 24.7% |
| Time to Breakeven | 242 days | 120 days |
| 2008 Global Financial Crisis | ||
| % Loss | -21.8% | -56.8% |
| % Gain to Breakeven | 27.9% | 131.3% |
| Time to Breakeven | 517 days | 1,480 days |
Compare to SBUX, CMG, YUM, QSR, TXRH
In The Past
McDonald's's stock fell -17.7% during the 2022 Inflation Shock from a high on 1/6/2022. A -17.7% loss requires a 21.5% gain to breakeven.
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About McDonald's (MCD)
McDonald's Corporation operates and franchises McDonald's restaurants in the United States and internationally. Its restaurants offer hamburgers and cheeseburgers, chicken sandwiches and nuggets, wraps, fries, salads, oatmeal, shakes, desserts, sundaes, soft serve cones, bakery items, soft drinks, coffee, and beverages and other beverages, as well as breakfast menu, including biscuit and bagel sandwiches, breakfast burritos, hotcakes, and other sandwiches. As of December 31, 2021, the company operated 40,031 restaurants. McDonald's Corporation was founded in 1940 and is headquartered in Chicago, Illinois.
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Here are 1-3 brief analogies to describe McDonald's:
- Coca-Cola for prepared meals: Just as Coca-Cola is a globally ubiquitous and highly consistent brand for beverages, McDonald's is the same for quick, standardized prepared meals.
- Walmart for quick meals: Similar to how Walmart provides a vast, convenient, and consistent option for everyday retail needs, McDonald's does the same for affordable and accessible quick meals.
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- Hamburgers and Cheeseburgers: Classic beef patties served in buns with various toppings.
- Chicken Sandwiches and Nuggets: A variety of poultry-based options, including crispy or grilled sandwiches and bite-sized nuggets.
- Fries: McDonald's signature golden, crispy potato sticks.
- Salads and Wraps: Lighter meal options including fresh greens and various fillings wrapped in tortillas.
- Breakfast Menu Items: A dedicated selection for morning meals, featuring items like hotcakes, breakfast sandwiches, and burritos.
- Desserts and Shakes: Sweet treats such as ice cream sundaes, soft-serve cones, milkshakes, and baked goods.
- Beverages: A broad array of drinks including soft drinks, coffee, and other non-alcoholic options.
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```htmlMcDonald's (MCD) primarily sells to individual consumers rather than other companies. Based on its operations as a fast-food restaurant chain, its major customer categories include:
- Families and Children: A significant portion of McDonald's customer base consists of families, often attracted by child-friendly menu items like the Happy Meal, play areas in some locations, and an overall family-oriented dining experience.
- Individuals Seeking Convenience and Speed: This category includes commuters, people on lunch breaks, travelers, and anyone looking for a quick, easily accessible, and consistent meal solution, particularly during busy times or when on the go.
- Value-Conscious Consumers: Customers who prioritize affordability and seek budget-friendly meal options are a key demographic for McDonald's, often utilizing value menus, combo deals, and promotions to get a satisfying meal at a lower cost.
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- Shift in consumer preferences towards healthier, plant-based, and sustainably sourced food options, challenging McDonald's traditional menu and brand perception.
- Increasing reliance on and power of third-party food delivery platforms, leading to eroded profit margins, loss of direct customer relationship and data, and increased platform leverage over McDonald's operations and pricing.
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Latest Trefis Analyses
Trade Ideas
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| Date | Ticker | Company | Category | Trade Strategy | 6M Fwd Rtn | 12M Fwd Rtn | 12M Max DD |
|---|---|---|---|---|---|---|---|
| 02272026 | MBLY | Mobileye Global | Dip Buy | DB | Cash/EquityDip Buyer with High Net Cash % EquityBuying dips for companies with significant net cash as a % of market cap along with meaningful cash flow generation | 0.0% | 0.0% | 0.0% |
| 02202026 | SAH | Sonic Automotive | Insider | Insider Buys | Low D/EStrong Insider BuyingCompanies with strong insider buying in the last 1 month, positive operating income and reasonable debt / market cap | -5.9% | -5.9% | -6.1% |
| 02132026 | MAT | Mattel | Insider | Insider Buys | Low D/EStrong Insider BuyingCompanies with strong insider buying in the last 1 month, positive operating income and reasonable debt / market cap | 2.9% | 2.9% | 0.0% |
| 02132026 | SONO | Sonos | Insider | Insider Buys | Low D/EStrong Insider BuyingCompanies with strong insider buying in the last 1 month, positive operating income and reasonable debt / market cap | -0.7% | -0.7% | -4.6% |
| 02062026 | DECK | Deckers Outdoor | Dip Buy | DB | P/E OPMDip Buy with Low PE and High MarginBuying dips for companies with tame PE and meaningfully high operating margin | 1.6% | 1.6% | -0.8% |
Research & Analysis
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Wealth Management
Peer Comparisons
| Peers to compare with: |
Financials
| Median | |
|---|---|
| Name | |
| Mkt Price | 129.78 |
| Mkt Cap | 43.8 |
| Rev LTM | 10,680 |
| Op Inc LTM | 2,510 |
| FCF LTM | 1,544 |
| FCF 3Y Avg | 1,428 |
| CFO LTM | 2,062 |
| CFO 3Y Avg | 1,884 |
Growth & Margins
| Median | |
|---|---|
| Name | |
| Rev Chg LTM | 7.1% |
| Rev Chg 3Y Avg | 8.9% |
| Rev Chg Q | 5.2% |
| QoQ Delta Rev Chg LTM | 1.3% |
| Op Mgn LTM | 21.6% |
| Op Mgn 3Y Avg | 22.4% |
| QoQ Delta Op Mgn LTM | -0.0% |
| CFO/Rev LTM | 17.9% |
| CFO/Rev 3Y Avg | 18.2% |
| FCF/Rev LTM | 13.7% |
| FCF/Rev 3Y Avg | 14.3% |
Valuation
| Median | |
|---|---|
| Name | |
| Mkt Cap | 43.8 |
| P/S | 3.3 |
| P/EBIT | 20.1 |
| P/E | 28.3 |
| P/CFO | 21.2 |
| Total Yield | 4.8% |
| Dividend Yield | 2.0% |
| FCF Yield 3Y Avg | 3.2% |
| D/E | 0.2 |
| Net D/E | 0.2 |
Returns
| Median | |
|---|---|
| Name | |
| 1M Rtn | 0.7% |
| 3M Rtn | 3.5% |
| 6M Rtn | 8.2% |
| 12M Rtn | 6.3% |
| 3Y Rtn | 31.5% |
| 1M Excs Rtn | 3.1% |
| 3M Excs Rtn | 6.3% |
| 6M Excs Rtn | 5.0% |
| 12M Excs Rtn | -16.5% |
| 3Y Excs Rtn | -39.6% |
Comparison Analyses
Segment Financials
Revenue by Segment| $ Mil | 2024 | 2023 | 2022 | 2021 | 2020 |
|---|---|---|---|---|---|
| International Operated Markets | 12,382 | 11,297 | 12,220 | 9,571 | 11,480 |
| United States (US) | 10,568 | 9,588 | 8,865 | 7,828 | 8,003 |
| International Developmental Licensed Markets & Corporate | 2,543 | 2,297 | 2,138 | 1,809 | 1,882 |
| Total | 25,493 | 23,183 | 23,223 | 19,208 | 21,364 |
| $ Mil | 2024 | 2023 | 2022 | 2021 | 2020 |
|---|---|---|---|---|---|
| International Operated Markets | 5,831 | 3,926 | 5,131 | 3,315 | 4,789 |
| United States (US) | 5,694 | 5,136 | 4,755 | 3,789 | 4,069 |
| International Developmental Licensed Markets & Corporate | 121 | 309 | 471 | 220 | 212 |
| Total | 11,646 | 9,371 | 10,356 | 7,324 | 9,070 |
| $ Mil | 2024 | 2023 | 2022 | 2021 | 2020 |
|---|---|---|---|---|---|
| International Operated Markets | 23,947 | 21,979 | 24,186 | 24,744 | 22,848 |
| United States (US) | 22,477 | 21,793 | 21,280 | 21,010 | 21,377 |
| International Developmental Licensed Markets & Corporate | 9,723 | 6,663 | 8,388 | 6,873 | 3,286 |
| Total | 56,147 | 50,436 | 53,854 | 52,627 | 47,511 |
Price Behavior
Price Behavior
| Market Price | $326.46 | |
| Market Cap ($ Bil) | 232.7 | |
| First Trading Date | 01/02/1970 | |
| Distance from 52W High | -4.3% | |
| 50 Days | 200 Days | |
| DMA Price | $318.53 | $305.02 |
| DMA Trend | indeterminate | up |
| Distance from DMA | 2.5% | 7.0% |
| 3M | 1YR | |
| Volatility | 15.1% | 17.1% |
| Downside Capture | -16.42 | 5.49 |
| Upside Capture | 3.76 | 16.19 |
| Correlation (SPY) | -3.8% | 17.3% |
MCD Betas & Captures as of 2/28/2026
[1] Upside and downside betas calculated using positive and negative benchmark daily returns respectively
| 1M | 2M | 3M | 6M | 1Y | 3Y | |
|---|---|---|---|---|---|---|
| Beta | -0.38 | -0.02 | -0.12 | -0.06 | 0.16 | 0.26 |
| Up Beta | 0.92 | 0.66 | 0.47 | 0.55 | 0.16 | 0.25 |
| Down Beta | -1.30 | -0.09 | -0.49 | -0.29 | 0.19 | 0.18 |
| Up Capture | 11% | 25% | 20% | 3% | 11% | 11% |
| Bmk +ve Days | 9 | 20 | 31 | 70 | 142 | 431 |
| Stock +ve Days | 13 | 23 | 33 | 66 | 130 | 394 |
| Down Capture | -118% | -69% | -46% | -33% | 10% | 52% |
| Bmk -ve Days | 12 | 21 | 30 | 54 | 109 | 320 |
| Stock -ve Days | 8 | 18 | 28 | 58 | 121 | 357 |
[1] Upside and downside betas calculated using positive and negative benchmark daily returns respectively
Based On 1-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with MCD | |
|---|---|---|---|---|
| MCD | 11.6% | 17.1% | 0.48 | - |
| Sector ETF (XLY) | 13.0% | 23.7% | 0.46 | 20.2% |
| Equity (SPY) | 19.6% | 18.9% | 0.81 | 17.0% |
| Gold (GLD) | 71.9% | 26.3% | 2.05 | 3.6% |
| Commodities (DBC) | 19.3% | 17.3% | 0.89 | -4.4% |
| Real Estate (VNQ) | 6.2% | 16.3% | 0.19 | 37.8% |
| Bitcoin (BTCUSD) | -15.3% | 44.2% | -0.25 | -1.9% |
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Based On 5-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with MCD | |
|---|---|---|---|---|
| MCD | 11.8% | 17.1% | 0.54 | - |
| Sector ETF (XLY) | 8.0% | 23.7% | 0.30 | 34.6% |
| Equity (SPY) | 13.1% | 17.0% | 0.61 | 39.2% |
| Gold (GLD) | 24.1% | 17.3% | 1.14 | 6.2% |
| Commodities (DBC) | 11.2% | 19.0% | 0.47 | 1.4% |
| Real Estate (VNQ) | 4.8% | 18.8% | 0.16 | 42.1% |
| Bitcoin (BTCUSD) | 6.3% | 56.7% | 0.33 | 7.7% |
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Based On 10-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with MCD | |
|---|---|---|---|---|
| MCD | 13.5% | 20.3% | 0.59 | - |
| Sector ETF (XLY) | 12.4% | 21.9% | 0.52 | 49.6% |
| Equity (SPY) | 14.5% | 17.9% | 0.70 | 54.2% |
| Gold (GLD) | 14.4% | 15.6% | 0.77 | 5.7% |
| Commodities (DBC) | 8.6% | 17.6% | 0.40 | 15.1% |
| Real Estate (VNQ) | 5.6% | 20.7% | 0.23 | 54.6% |
| Bitcoin (BTCUSD) | 67.4% | 66.8% | 1.07 | 11.5% |
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Returns Analyses
Earnings Returns History
Expand for More| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D Returns | 5D Returns | 21D Returns |
| 2/11/2026 | 2.7% | 1.2% | 1.6% |
| 11/5/2025 | 2.2% | 2.5% | 4.6% |
| 8/6/2025 | 3.0% | 1.0% | 6.7% |
| 5/1/2025 | -1.9% | -0.5% | -1.8% |
| 2/10/2025 | 4.8% | 4.8% | 4.8% |
| 10/29/2024 | -0.6% | -1.3% | -0.2% |
| 7/29/2024 | 3.7% | 9.8% | 14.6% |
| 4/30/2024 | -0.2% | -1.6% | -8.8% |
| ... | |||
| SUMMARY STATS | |||
| # Positive | 13 | 16 | 14 |
| # Negative | 11 | 8 | 10 |
| Median Positive | 2.7% | 2.7% | 4.7% |
| Median Negative | -0.6% | -1.4% | -2.4% |
| Max Positive | 4.8% | 9.8% | 14.6% |
| Max Negative | -3.7% | -3.8% | -8.8% |
SEC Filings
Expand for More| Report Date | Filing Date | Filing |
|---|---|---|
| 09/30/2025 | 11/05/2025 | 10-Q |
| 06/30/2025 | 08/06/2025 | 10-Q |
| 03/31/2025 | 05/12/2025 | 10-Q |
| 12/31/2024 | 02/25/2025 | 10-K |
| 09/30/2024 | 11/07/2024 | 10-Q |
| 06/30/2024 | 08/08/2024 | 10-Q |
| 03/31/2024 | 05/08/2024 | 10-Q |
| 12/31/2023 | 02/22/2024 | 10-K |
| 09/30/2023 | 11/02/2023 | 10-Q |
| 06/30/2023 | 08/02/2023 | 10-Q |
| 03/31/2023 | 05/04/2023 | 10-Q |
| 12/31/2022 | 02/24/2023 | 10-K |
| 09/30/2022 | 11/07/2022 | 10-Q |
| 06/30/2022 | 08/04/2022 | 10-Q |
| 03/31/2022 | 05/02/2022 | 10-Q |
| 12/31/2021 | 02/24/2022 | 10-K |
Insider Activity
Expand for More| # | Owner | Title | Holding | Action | Filing Date | Price | Shares | Transacted Value | Value of Held Shares | Form |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Ralls-Morrison, Desiree | EVP, Chief Legal Officer | Direct | Sell | 12182025 | 320.00 | 2,486 | 795,520 | 2,005,763 | Form |
| 2 | Flatley, Edith Morgan | EVP - Global CMO | Direct | Sell | 12152025 | 315.00 | 658 | 207,270 | 1,952,861 | Form |
| 3 | Steijaert, Manuel Jm | EVP - President, IOM | Direct | Sell | 12022025 | 305.50 | 6,567 | 2,006,218 | 1,407,164 | Form |
| 4 | Borden, Ian Frederick | EVP - CFO | Direct | Sell | 11212025 | 310.00 | 17,134 | 5,311,540 | 8,169,476 | Form |
| 5 | Erlinger, Joseph M | President, McDonald's USA | Direct | Sell | 11182025 | 305.82 | 3,195 | 977,095 | 1,861,869 | Form |
MCD Trade Sentinel
Stock Conviction
AVOID (Score 1-2)
CONVICTION RATIONALE
The probability-adjusted skew is well below 1.0x, indicating an unfavorable risk/reward profile. The primary friction point—weakness in the core U.S. low-income consumer—is actively playing out, as evidenced by decelerating sales and negative traffic. While the long-term thesis is plausible, the near-term headwinds are significant and appear to be worsening, making the stock unattractive at its current valuation.
STOCK ARCHETYPE
Mature Cash CowMcDonald's fits the 'Mature Cash Cow' archetype due to its massive scale, high and stable franchise-driven operating margins (mid-to-high 40% range), significant cash flow generation, and a capital return strategy focused on dividends and buybacks. Its growth is steady but moderate, characteristic of a mature market leader.
INVESTMENT THESIS
The primary long thesis rests on McDonald's dual strategy of aggressive global restaurant expansion, targeting 50,000 locations by 2027, combined with the scaling of its MyMcDonald's Rewards program. The goal to grow the loyalty user base to 250 million active members is designed to increase visit frequency and average transaction value, creating a significant, high-margin revenue layer on top of the expanding physical footprint.
Mechanism:
The company captures value through increased royalty and rental income from a larger franchisee base and by leveraging its digital platform to drive higher-margin, incremental sales from a more engaged customer base. Loyalty members visit nearly 2.5 times more frequently than non-members.
Supporting Evidence:
- Strategic goal to expand to 50,000 restaurants by 2027, with 2,200 net new openings planned for 2025.
- Target to grow loyalty program to 250 million 90-day active users, generating $45 billion in annual system-wide sales by 2027.
- MyMcDonald's Rewards members' visit frequency is 2.5x higher than non-members, and their average transaction values increase by about 15%.
- The heavily franchised model (~95%) ensures new unit growth is capital-light and accretive to already high corporate operating margins.
PRIMARY RISK
The most significant risk is the sustained pressure on the core low-income consumer in the U.S. market. Persistently high inflation has created 'check fatigue', leading this key demographic to reduce visit frequency. This forces a greater reliance on value promotions which can pressure franchisee margins and makes it difficult to grow comparable sales without significant price increases, a strategy that is reaching its limit.
Mechanism:
The thesis breaks if negative guest counts in the U.S. persist or worsen, indicating an erosion of brand value proposition among its core customer base. This would stall same-store sales growth, pressure franchisee profitability, and undermine the stock's premium valuation.
Supporting Evidence:
- Management noted a double-digit percentage drop in traffic from low-income consumers in Q3 2025.
- U.S. comparable sales turned negative (-1.4%) in Q4 2024, driven by insufficient guest counts.
- Global comparable sales decelerated sharply from +3.8% in Q2 2025 to +0.4% in Q4 2024, indicating momentum has stalled.
- There have been 28 downward EPS estimate revisions in the last 90 days, compared to only 4 upward, signaling growing analyst concern.
Key KPI Watchlist
| KPI | Threshold | Rationale |
|---|---|---|
| U.S. Guest Counts | Return to positive YoY growth | This is the primary leading indicator of health in the company's core market and directly addresses the main bear thesis. |
| Global Comparable Sales | Re-acceleration above 2-3% | This metric reflects the overall momentum of the business and its ability to balance pricing with volume. |
| Active MyMcDonald's Rewards Users | Sequential quarterly growth towards the 250M target | This is the most direct measure of the success of the digital 'Alpha Driver' thesis. |
Core Investment Debate
Digital Growth vs. Consumer Health
BULL VIEW
Bulls bet loyalty members (targeting $45B sales by 2027) and aggressive unit expansion (50k stores by 2027) will create durable growth, defending best-in-class margins.
CORE TENSION
Can growth from the 'Accelerating the Arches' digital/loyalty strategy offset the material decline in traffic from its core low-income consumer base facing 'check fatigue'?
PREVAILING SENTIMENT
BEARISH
The U.S. market, a key region, saw comparable sales decrease by 1.4% in the most recent quarter, driven by negative guest counts.
BEAR VIEW
Bears see a ceiling on pricing power, forecasting sustained negative guest counts that will force margin-eroding promotions to defend market share in the U.S.
Next 6 months: Risks and Catalysts
| Timeline | Event & Metric To Watch |
|---|---|
Late April 2026 | Q1 2026 Earnings Report Watch: U.S. Guest Counts. A reversal of the negative trend is required to invalidate the core bear thesis. |
Late April 2026 | Next Earnings Call - Margin Guidance Watch: Full-year 2026 Operating Margin guidance. Watch for any cut from the mid-to-high 40% range. |
Ongoing / Monthly | Federal Reserve & CPI Data Releases Watch: Consumer credit delinquency rates and CPI for food away from home. |
Anytime | Federal Appeals Court Ruling on 'Joint Employer' Standard Watch: Court decision on the NLRB's expanded joint employer rule. |
Key Events in Last 6 Months
| Date | Event | Stock Impact |
|---|---|---|
2025-08-06 | Q2 2025 Earnings Release Details: The company reported strong Q2 results with global comparable sales growth of +3.8%, demonstrating resilience prior to the more recent slowdown. | Rose significantly by 3.0% $295.31 -> $304.09 |
2025-09-02 | Dividend Increase Announcement Details: McDonald's Board of Directors approved a quarterly cash dividend increase, signaling confidence in its cash flow and commitment to shareholder returns. | Modest 1.3% gain $309.91 -> $313.87 |
2025-10-14 | New 'Best Burger' Initiative Details: Company announced upgrades to its core burgers, including softer buns and meltier cheese, which began rolling out, aiming to improve quality perception. | Modest 1.5% gain $298.31 -> $302.74 |
2025-11-05 | Q3 2025 Earnings Release Details: Despite missing EPS and revenue estimates, the stock gained. Global comparable sales grew 3.6%, but management flagged a 'double-digit drop' in traffic from low-income consumers. | Rose significantly by 2.2% $297.42 -> $303.84 |
2025-12-05 | Investor Day & Strategic Update Details: McDonald's unveiled its 'Accelerating the Arches 2.0' plan, setting an ambitious target to reach 50,000 global restaurants by the end of 2027. | Flat (0.9%) $308.54 -> $311.23 |
2026-02-05 | Q4 2025 Earnings Release Details: Company reported a significant deceleration in growth, with global comparable sales at +0.4% and U.S. comparable sales falling -1.4%, confirming consumer weakness. | Muted (-0.1%) $323.69 -> $323.48 |
Risk Management
Position Sizing
1% - 3%
CONSERVATIVE
Stock is in a Stable Volatility regime. However, the Bearish sentiment, driven by decelerating U.S. sales and low visibility into a growth re-acceleration, warrants a cautious approach. We will cap exposure to a Conservative (1-3%) sizing until U.S. guest counts stabilize.
Diversification Alternatives
COST
SECTORUnlike MCD, COST's membership model creates a loyal, higher-income customer base, making it more resilient to the 'check fatigue' affecting low-income consumers.
Core Thesis: The core thesis is a durable, low-price value proposition anchored by a sticky membership model, which delivers consistent traffic and sales growth across economic cycles.
How Is The Market Pricing MCD?
McDonald's is executing a transition from a mature fast-food operator to a tech-enabled growth company, leveraging its massive real estate footprint and global brand to accelerate restaurant expansion and deepen customer relationships through its digital loyalty programs.
Filter all news through the lens of accelerated, capital-efficient unit growth and the deepening of digital customer relationships.
What will confirm the thesis
Net new restaurant openings exceeding a 4.5% annual growth rate; Systemwide sales from loyalty members growing >15% annually; positive comparable sales growth, particularly in the U.S. market.
What will damage the thesis
Slowing pace of new restaurant openings; signs of franchisee distress or pushback on expansion plans; decline in loyalty member growth or engagement; sustained negative comparable sales in key markets.
Noise: Real but irrelevant to thesis
Short-term fluctuations in commodity costs; quarterly variations in international market performance unless it signals a long-term trend change; competitor menu announcements that are not part of a broader strategic shift.
Repricing Catalyst
The 'Accelerating the Arches' strategy, which targets expanding to 50,000 global restaurants by the end of 2027 and growing its active loyalty program user base to 250 million, aiming to increase annual systemwide sales from loyalty members to $45.0 billion.
What MCD Makes & Who Pays
TTM figures based on Form 10-K for the year ended December 31, 2025, filed February 24, 2026
Franchised & Licensed Restaurants
$16548000.0B TTM (61% of Total) · 81% MarginWhat It Is
Not applicable (collects fees on sales of all McDonald's products).
Who Pays & How
Independent owner-operators pay for the right to use the McDonald's brand, operating system, and for the lease of the restaurant real estate. The lock-in is the powerful global brand recognition which drives customer traffic, and the high initial investment cost of a franchise.
A combination of a one-time initial franchise fee, ongoing royalty fees (typically 4-5% of gross sales), and rent on the restaurant property (which can be a percentage of sales or a fixed amount).
Competition
Other large QSR franchisors (e.g., Restaurant Brands International - Burger King, Yum! Brands - KFC)
Some competitors may offer lower entry costs or more flexible franchise terms.
McDonald's owns a significant portion of the real estate its restaurants operate on, creating a stable, high-margin rental income stream that competitors cannot easily replicate. Its global brand value is a significant moat, ranked #9 globally by Interbrand in 2025.
Company-Operated Restaurants
$9690000.0B TTM (36% of Total) · 17% MarginWhat It Is
Hamburgers (e.g., Big Mac, Quarter Pounder), Chicken McNuggets, French Fries, and other food and beverage items sold directly to consumers.
Who Pays & How
Consumers pay for quick, convenient, and affordable meals. The brand's consistency and global recognition are key purchasing drivers.
Per-unit sale of food and beverage items.
Competition
Other burger-focused QSR chains (e.g., Burger King, Wendy's) and coffee chains (e.g., Starbucks).
Competitors like Starbucks have a stronger position in the premium coffee segment. Burger King and Wendy's compete directly on burger offerings and value meals.
Unmatched global scale, brand recognition, and a vast and strategically located real estate portfolio provide significant competitive advantages in terms of purchasing power, advertising reach, and customer convenience.
MCD Evolution: Price Return by Era
1940–1961 · The Founding
From Barbecue to 'Speedee' System
Brothers Richard and Maurice McDonald opened their first restaurant in 1940. In 1948, they streamlined their operation into the 'Speedee Service System,' focusing on a limited menu of hamburgers, which laid the foundation for the modern fast-food industry. Ray Kroc joined as a franchise agent in 1955 and purchased the company from the brothers in 1961 for $2.7 million.
1962–1990s · Global Expansion & Brand Dominance
Building a Global Empire +60.86% (1998)
Under Ray Kroc's leadership, McDonald's experienced explosive growth, both domestically and internationally, opening its first international restaurant in Canada in 1967. Iconic menu items like the Big Mac (1968) and Egg McMuffin (1975) were introduced. This era was defined by rapid unit expansion and the cementing of McDonald's as a dominant global brand, a key part of which was the strategy of owning the real estate under its franchised locations.
2000s–Present · Modernization & Digital Transformation
Accelerating the Arches +41.41% (2017)
Facing increased competition and changing consumer tastes, McDonald's has focused on modernizing its restaurants ('Experience of the Future'), introducing healthier menu options, and embracing technology. The current 'Accelerating the Arches' strategy emphasizes digital channels, delivery, and a drive-thru, alongside an aggressive plan to expand to 50,000 restaurants by 2027, transforming the company into a more tech-forward, capital-light growth story.
Market Appears To Be Cautiously Supportive
Price structure is strongly bullish. The regime, trend, and proximity to highs all point towards intact institutional trend. Relative to SPY: Strong 63D outperformance but 'relative strength' momentum is fading, indicating that money rotation may be maturing. Volume and momentum are supportive. OBV (on-balance volume) and up/down volume character favor buyers. Earnings history is neutral. The market reaction and subsequent drift do not give a clear directional signal.
① Structure
+4
Structural pillar score (-4 to +4). Driven by trend regime, SMA cross events, proximity to 52W high, and relative strength vs SPY.
② Volume / Momentum
+2
Volume/Momentum pillar score (-4 to +4). Driven by institutional footprint score, OBV divergence, and momentum character.
③ Catalyst
0
Catalyst pillar score (-4 to +4). Driven by earnings day reaction, 20D post-earnings drift, and post-earnings volume character.
Combined Score
6 / 12
1
Price Structure & Trend
Trending Up · Golden Cross
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2
Momentum
Pausing
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3
Relative Strength vs. SPY
Mild Outperformance
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4
Institutional Footprint & Volume
Mild Accumulation
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5
Volatility
Normal
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6
Key Price Levels
Range · Vol Falling
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7
Earnings Reaction History
Diminishing Reward
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8
How the Verdict Is Derived
Three Pillars
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External Quote Links
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| YCharts | Perplexity Finance |
| FinViz |
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