Using the PEG framework with analyst consensus forward EPS growth of 11.1% plus 2.3% dividend yield, McDonald's Corporation has a fair value of $146.58 based on NTM EPS (FY2026) of $13.22. The current PEG ratio is 2.12.
PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.
PEG works well for steady growers with predictable earnings.
| EPS Growth RateForward | 8.8% |
| Dividend Yield | +2.3% |
| Adjusted Growth (clamped 8–25%) | 11.1% |
| Fair P/E | 11.1x |
| NTM EPS (FY2026) | $13.22 |
| Fair Value | $146.58 |
| Period | EPS Est. | Growth | Analysts |
|---|---|---|---|
| FY2025 (actual) | $11.95 | — | — |
| FY2026E | $13.22 | +10.6% | 24 |
| FY2027E | $14.36 | +8.7% | 24 |
| FY2028E | $15.37 | +7.0% | 13 |
| FY2029E | $16.74 | +9.0% | 12 |
| FY2030E | $18.20 | +8.7% | 6 |
5Y Forward EPS CAGR: 8.8%
| Year | Net Income | EPS | YoY |
|---|---|---|---|
| FY2021 | $7.5B | $10.04 | — |
| FY2022 | $6.2B | $8.33 | -17.0% |
| FY2023 | $8.5B | $11.56 | +38.8% |
| FY2024 | $8.2B | $11.39 | -1.5% |
| FY2025 | $8.6B | $11.95 | +4.9% |
4Y Historical EPS CAGR: 4.5%
The PEG Fair Value uses the Price/Earnings-to-Growth framework. A stock is fairly valued when its P/E ratio equals its earnings growth rate (PEG = 1.0). This model adds dividend yield to the growth rate per the original PEGY formula.
Growth rate priority: analyst consensus forward EPS CAGR (when ≥ 3 analysts cover the stock), falling back to historical EPS CAGR. Using EPS rather than net income avoids distortion from share buybacks. The growth rate is clamped between 8% and 25% — below 8% would undervalue stable earners, while above 25% would overvalue unsustainable spikes.