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McDonald's Corporation (MCD)
Intrinsic Value (DCF)
Current$309.44
→
Intrinsic$110.58
-64%
$51.21$110.58$228.77
Market implies 27% growth for 5 years
Current price reflects execution expectations above 8% growth — not unreasonable for quality businesses.
At $309, the market prices in continued strong cash flow growth (27%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $51 → Bull $229. Current price implies expectations above the base case, closer to bull expectations.
| Discount ↓Growth → | 4% | 6% | 8% | 10% |
|---|---|---|---|---|
| 8% | $151 | $171 | $193 | $216 |
| 10% | $82 | $96 | $111 | $126 |
| 12% | $46 | $56 | $67 | $79 |
| 14% | $24 | $32 | $40 | $49 |
Bull Case
- Bull case ($229) with 10% growth, 8% discount rate
- Conservative 8% growth assumption is achievable based on track record
Bear Case
- Bear case ($51) implies 83% downside at 6% growth, 12% discount
- Price reflects 27% growth expectations vs 8% historical — high bar to clear
- Trading 64% above base case — execution must exceed assumptions to justify
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5-Year Free Cash Flow Projection
Year 1$7.21B
Year 2$7.78B
Year 3$8.40B
Year 4$9.08B
Year 5$9.80B
Terminal$155.35B
📐 Model Inputs
Growth Rate8.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate9.5%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$6.67BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.