MCD
McDonald's Corporation
$248.48
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Fair Value
Trading 20.0% below fair value
You pay
$248.48
Bear
$262.90
Fair
$310.70
Bull
$358.50
Bear
$262.90
+5.8%
$11.95 × 22x P/E
Fair
$310.70
+25.0%
$11.95 × 26x P/E
Bull
$358.50
+44.3%
$11.95 × 30x P/E
Adjust Assumptions
26.0x
11.95$
Key Value Driver
Normalized P/E multiple (26x base case)
Implied Market Multiple
20.8x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (62 analysts)
$304.29
Divergence from AlphaVal
2%
Summary
Applying a 26x P/E to adjusted EPS of $11.95, the base-case value is $310.70 per share. DDM cross-check: $427.28.
Warnings
Dividend-based valuation: $427.28 (above our primary estimate by 38%). 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