MCD is a strong long-term hold but faces short-term margin pressure from inflation; current valuation metrics are uncertain, so immediate buying is not recommended.

What is this arrow? McDonald's. McDonald's. Oh my God, yes. As you know, this is n't a stock we talk about much on the channel, but do you know why we're talking about it today?

The stock has plummeted by more than 30% since March. So, how long is that period? About 6 months? The stock has fallen by more than 30%. This is a huge crash for a stock like McDonald's.

And remember, the stock market has been , as you know, doing well enough since March. The Nasdaq index may have risen significantly compared to where it was in March. The market was good, yet McDonald's was completely defeated and crushed, wasn't it?

Now, look at McDonald's performance over the past 5 years. Listen to this. The stock has fallen by 4% over the past five years . It's offering you a negative return over the past five years for one of the most legendary companies, isn't it ?

Now, McDonald's is n't a stock I usually look into or even pay attention to from afar, but if it drops 30% in a few months, I'll check it out, won't I ? And so, I was messing around with the artificial intelligence and asking it what was happening with McDonald's.

Why is this stock falling, isn't it? He talks about low-income people declining to visit fast food restaurants frequently. Traffic trends in the industry in the United States and globally have become flat or negative.

Um, he's talking about their recent failure to achieve earnings per share. Revenues have declined slightly recently, haven't they? Sales at similar stores globally and locally shrank by 1%, breaking years of growth.

It was clear that he talked about what we had discussed earlier regarding inflation, costs, and all those things, and those were very real issues. Um, they had this Investor Day which I'll have to look at in full to see what happened , but he talked about long-term goals that were set on Investor Day and did not meet the expectations of impatient investors.

Geopolitical headwinds in the Middle East. I mean, it seems, you know, for a stock like McDonald's, a company of this quality, to drop 30% in a few months, there must be multiple factors behind it.

The reason cannot be just one thing. It must be a bunch of things that went wrong all at once, right?

Um, they had this Investor Day which I'll have to look at in full to see what happened, but he talked about long-term goals that were set on Investor Day and did not meet the expectations of impatient investors.

Geopolitical headwinds in the Middle East. I mean, it seems, you know, for a stock like McDonald's, a company of this quality, to drop 30% in a few months, there must be multiple factors behind it.

The reason cannot be just one thing. It must be a bunch of things that went wrong all at once, right?

Well, I was looking in the private group because I always post income data. I evaluate income data all the time, don't I? When I typed in McDonald's name, I realized I hadn't evaluated its most recent income statement.

I have the statement from 4 months ago, and I gave them a B+ rating. I have the statement from 7 months ago, and I gave them a B rating. So I said, "Oh my god, I need to evaluate McDonald's most recent income statement to see what's going on here because I haven't evaluated it."

This is what I found. A company found that its franchise restaurant revenues increased by 4%. Sales at the company's restaurants rose by 3%. The figures are rather modest. Other revenues increased by 6%, so the company's total revenues increased by 4%.

I mean, you would normally want to see a company like McDonald's achieve greater growth in the 5 to 7% range. A 4% figure is very modest, isn't it? Regarding operating costs and expenses, occupancy and expenses of franchise restaurants increased by 4%, and company-owned restaurants by 3%, which are almost the same percentages as the increase in revenues, right?

They recorded a 9% increase in spending on other restaurants. That was a bit high, wasn't it? They have faced a significant impact from the depreciation and amortization of the company's assets, haven't they?

Therefore, operating income increased by 3%, which is clearly a lower figure than the 4% increase in revenue. So, it's not the end of the world, but you know, you want to see operating income rise.

If McDonald's revenue is up 4%, you'd really like to see operating income up 5, 6 or 7%, something like that, wouldn't you? Net income rose by 5%, and earnings per share rose by 6%.

It was a B rating for McDonald's. It's not the worst, but I think there's a lot of concern about what's actually going on here, looking at these diesel prices. All these things need to be moved.

The costs will affect McDonald's. There is likely concern that consumers will come under greater pressure due to inflation in the next few months, isn't there? This means that if they go to McDonald's, they are likely to choose less expensive items from the menu, which may result in lower profit margins for McDonald's.

At the same time, McDonald's faces inflationary costs that it cannot really pass on to the consumer, which means lower profit margins for the next six to twelve months, lower earnings per share, and possibly a decline in revenue and comparable store sales.

This makes it a very tough short-term period for McDonald's, doesn't it? But, with regard to a company like McDonald's, which is a legendary company, you should remember that you should view it as a long-term asset.

This is a long-term asset. So, I'm looking at McDonald's here, with a future price-to-earnings ratio of 18.5 on 1001xstocks.com, right? Anytime you get a McDonald's with a future price-to-earnings ratio of less than 20, that's usually a buying opportunity.

If you can get this multiplier under 20 for McDonald's, it's a high-quality company that is essentially recession-proof, but not really inflation-proof. That's the problem with McDonald's, isn't it?

I am not sure that this future multiplier can be trusted. Because if all costs become higher, such as the increased cost of lettuce due to transportation costs, beef, bread, etc. If they are unable to pass that on to the consumer, consumers may choose a McDouble instead of a Big Mac, opting for cheaper alternatives, and McDonald's may be forced to offer more promotions.

That could mean lower profit margins for McDonald's in the short term, right? Therefore, I am not sure whether we can trust the current forward price-to-earnings ratio of 18.5.

There are periods of time when I usually say about a company, "Oh, that multiplier is probably less than what's written." However, in this case, the actual multiplier may be higher.

This is the big risk here for McDonald's, isn't it? At least in the short term, right? Now, McDonald's is of course a great company. The dividend yield is over 3%, so it is attractive.

Therefore, this is a stock that I will definitely do more research on. But I am not in a position to say, "I should buy McDonald's shares tomorrow." But, because there are so many opportunities in this market, isn't there?

They are just one opportunity out of many. But they definitely caught my attention because it's a great brand. They are here, they have been here for decades. They will be here for decades to come, won't they?

People still eat at McDonald's, that's the reality, isn't it?

Because, my God, if McDonald's is affected, damn it, if you're another player in the market, you're bound to be severely affected, aren't you?

Some of the most boring stocks are like McDonald's, right? And perhaps some others that are not the most exciting options, but they will be fine even if we enter a recessionary environment, won't they?

Because if McDonald's stock price were 125 today, yes, I would probably rush to buy every available McDonald's stock, wouldn't I? At the current price, I'm like, "Okay, that's definitely eyed, but I don't know if it's the right time to buy some."

If McDonald's were always $400 like it is today, I wouldn't care. I don't care if it's McDonald's.