Now trading at a price of $256.39, McDonald's has moved 2.1% so far today.
Over the last year, McDonald's logged a 3.0% change, with its stock price reaching a high of $299.35 and a low of $245.73. Over the same period, the stock underperformed the S&P 500 index by -15.0%. As of April 2023, the company's 50-day average price was $272.87. McDonald's Corporation operates and franchises McDonald's restaurants in the United States and internationally. Based in Chicago, IL, the large-cap Consumer Discretionary company has 100,000 full time employees. McDonald's has offered a 2.4% dividend yield over the last 12 months.
Wider Gross Margins Than the Industry Average of 30.07%:
| 2018-02-23 | 2019-02-22 | 2020-02-26 | 2021-02-23 | 2022-02-24 | 2023-02-24 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $22,820 | $21,258 | $21,364 | $19,208 | $23,223 | $23,183 |
| Gross Margins | 47.0% | 62.0% | 63.0% | 63.0% | 65.0% | 67.0% |
| Operating Margins | 42% | 42% | 42% | 38% | 45% | 40% |
| Net Margins | 23.0% | 28.0% | 28.0% | 25.0% | 32.0% | 27.0% |
| Net Income (MM) | $5,192 | $5,924 | $6,025 | $4,730 | $7,545 | $6,177 |
| Net Interest Expense (MM) | -$921 | -$981 | -$1,122 | -$1,218 | -$1,186 | -$1,207 |
| Depreciation & Amort. (MM) | -$1,363 | -$1,482 | -$1,618 | -$1,751 | -$1,868 | -$1,871 |
| Earnings Per Share | $6.37 | $7.54 | $7.88 | $6.31 | $10.04 | $8.33 |
| EPS Growth | n/a | 18.37% | 4.51% | -19.92% | 59.11% | -17.03% |
| Diluted Shares (MM) | 816 | 786 | 765 | 750 | 752 | 741 |
| Free Cash Flow (MM) | $6,340 | $9,017 | $10,365 | $7,879 | $11,075 | $9,247 |
| Capital Expenditures (MM) | -$789 | -$2,051 | -$2,242 | -$1,613 | -$1,934 | -$1,860 |
| Net Current Assets (MM) | -$31,744 | -$35,016 | -$52,163 | -$54,208 | -$51,307 | -$51,015 |
| Long Term Debt (MM) | $29,536 | $31,075 | $34,118 | $35,197 | $35,623 | $35,904 |
McDonald's has strong margins with a stable trend, wider gross margins than its peer group, and positive EPS growth. Furthermore, McDonald's has weak revenue growth and a flat capital expenditure trend, irregular cash flows, and just enough current assets to cover current liabilities.
McDonald's's Valuation Is in Line With Its Sector Averages:
McDonald's has a trailing twelve month P/E ratio of 25.1, compared to an average of 22.33 for the Consumer Discretionary sector. Based on its EPS guidance of $12.44, the company has a forward P/E ratio of 21.9. The company doesn't issue forward earnings guidance, and the compound average growth rate of its last 6 years of reported EPS is 4.6%. On this basis, the company's PEG ratio is 5.5, which suggests that it is overpriced.
Analysts Give McDonald's an Average Rating of Buy:
The 33 analysts following McDonald's have set target prices ranging from $283.0 to $383.0 per share, for an average of $323.88 with a buy rating. As of April 2023, the company is trading -15.7% away from its average target price, indicating that there is an analyst consensus of strong upside potential.
McDonald's has a very low short interest because 0.9% of the company's shares are sold short. Institutions own 70.4% of the company's shares, and the insider ownership rate stands at 0.21%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 9% stake in the company is worth $17,482,573,099.
