Image Source: PexelsAs part of an ongoing series, we typically conduct an analysis on one of the companies in our screens each week. This week, we thought we’d take a look at one of the stocks that is not currently in our screens: McDonald’s Corp (MCD).
Profile
McDonald’s is the largest restaurant owner-operator in the world, with 2023 system sales of $130 billion across nearly than 42,000 stores and 115 markets. McDonald’s pioneered the franchise model, building its footprint through partnerships with independent restaurant franchisees and master franchise partners around the globe.The company earns roughly 60% of its revenue from franchise royalty fees and lease payments, with most of the remainder coming from company-operated stores across its three core segments: the United States, internationally operated markets, and international developmental/licensed markets.
Recent Performance
Over the past twelve months, the share price has moved down by 7.67%.
Source: Google Finance
Inputs
Forecasted Free Cash Flows (FCFs)
Terminal Value
Present Value of Terminal Value
Present Value of Free Cash Flows
Enterprise Value
Net Debt
Equity Value
Per-Share DCF Value
Conclusion
Based on the DCF valuation, the stock is undervalued. The DCF value of $292.26 per share is higher than the recent market price of $276.69. The margin of safety is 8.04%.More By This Author:Why Unilever PLC Stock Is A Buy
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