MCD
McDonald's Corporation
$270.67
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Fair Value
Trading 16.0% below fair value
You pay
$270.67
Bear
$272.73
Fair
$322.31
Bull
$371.90
Bear
$272.73
+0.8%
$12.07 × 22x P/E
Fair
$322.31
+19.1%
$12.07 × 26x P/E
Bull
$371.90
+37.4%
$12.07 × 30x P/E
Key Value Driver
Normalized P/E multiple (26x base case)
Implied Market Multiple
22.4x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $338.22 from 62 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $322.31 per share.
Warnings
Dividend-based valuation: $427.28 (above our primary estimate by 36%). Large gaps may signal the dividend doesn't reflect full earning power.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples