McDonald's adding mobile ordering
Yesterday, McDonald's announced that they will have mobile ordering and payment in all domestic restaurants by the end of 2017. This is ahead of Wendy's (who will have mobile ordering and payment in half of its restaurants by the end of 2017) as well as Burger King and Jack in the Box (who are both still in testing). As a result, Wells Fargo upgraded its rating from perform to outperform.
Farmer cited how the fast-food giant will roll out mobile smartphone ordering and payment functionality to all 14,000 domestic restaurants by the fourth quarter of 2017. In addition, the company plans to install digital ordering kiosks in 2,500 stores by year-end, according to the analystAs a result, he raised his McDonald's valuation range to $145 to $150 from $125 to $130, representing 13 percent upside at the midpoint from Thursday's close.
The analyst also increased his 2017 earnings-per-share forecast to $6.22 from $6.21 versus the Wall Street consensus of $6.17.
Do those numbers seem generous to you monkeys? While mobile order and payment for fast food is a nice feature (cutting down on your actual wait time in the restaurant), I don't think that it would increase the foot traffic/revenue. At the same time, the mobile order/payment system worked out well for Taco Bell; it led the Yum Brands stores in sales for the quarter that it came out. Could mobile ordering and payment have the same kind of effect on McDonald's?