McDonald’s shares reached an all-time high following the announcement that automated ordering kiosks will be replacing cashiers in 2,500 stores across the U.S.
CNBC reports that McDonald’s shares have reached an all-time high following the announcement of automated ordering kiosks replacing cashiers in 2,500 stores across the country. The fast food chain’s shares increased in value by 26 percent this year compared to the S&P 500’s 10 percent return. Andrew Charles of the financial services firm Cowen cited McDonald’s plans to replace many paid workers with automated ordering machines and the roll out of mobile ordering in 14,000 stores across the U.S. by the end of 2017 for the increase in McDonald’s share prices.
“MCD is cultivating a digital platform through mobile ordering and Experience of the Future (EOTF), an in-store technological overhaul most conspicuous through kiosk ordering and table delivery,” said Charles in a note to clients on Tuesday. “Our analysis suggests efforts should bear fruit in 2018 with a combined 130 bps [basis points] contribution to U.S. comps [comparable sales].”
Charles raised his valuation of McDonald’s shares from $142 to $180, showing a 17.5 percent increase from Monday’s market close. Charles also raised his earnings-per-share forecast for 2018 from $6.71 to $6.87 compared to the Wall Street estimation of $6.83. “MCD has done a great job launching popular innovations within the context of simplifying the menu, while introducing more effective value initiatives that have recently begun to improve the brand’s value perceptions,” wrote Charles.
Fast food chains have been moving towards automation for some time now, with chains such as Caliburger even introducing burger flipping robots. Flippy, the burger-flipping robot, was developed by Miso Robotics and began working in Caliburger in March.
“Much like self-driving vehicles, our system continuously learns from its experiences to improve over time,” said David Zito, CEO of Miso Robotics, “Though we are starting with the relatively ‘simple’ task of cooking burgers, our proprietary AI software allows our kitchen assistants to be adaptable and therefore can be trained to help with almost any dull, dirty or dangerous task in a commercial kitchen — whether it’s frying chicken, cutting vegetables or final plating.”