McDonald’s OCF Margin Rises to 39.2%, Analysts Target $371 Valuation
McDonald’s operating cash flow margin rose to 39.2% of revenue in 2025, boosting free cash flow margin to 26.7% despite capex rising to 12.5% of sales. Analysts have raised price targets, eyeing a $9 billion FCF in 2026 supporting a $371.30 valuation.
1. Operating Cash Flow and Free Cash Flow Trends
In 2025, McDonald’s operating cash flow margin climbed to 39.2% of revenue from 36.5% the prior year on sales of $26.9 billion, while free cash flow margin increased to 26.7% from 25.7%. This improvement reflects stronger operating leverage as revenue growth outpaced cash flow gains.
2. Capex Investments and Efficiency
The company expanded capex to 12.5% of revenue from 10.7%, funding ongoing development and technology upgrades without compromising free cash generation. Higher investment levels demonstrate McDonald’s ability to reinvest in growth while maintaining robust cash yields.
3. Analyst Price Target Revisions
Following the earnings, analysts revised their models to forecast $9 billion in free cash flow for 2026, underpinning a new consensus valuation target of $371.30. These upgrades reflect confidence in sustained cash flow expansion and potential stock upside.