Goldman Upgrades McDonald's On Confidence In Same-store Sales Improvement

By Tonya Garcia Markets MarketWatch Pulse

McDonald's Corp. was upgraded to buy from neutral at Goldman Sachs on Wednesday based on confidence that same-store sales will improve. The price target was raised to $153 from $126. Goldman says positive consumer reviews for the "Experience of the Future" could drive sales and excitement to push same-store sales higher. There's also a clearer timeline for when the upgrades will roll out. The "Experience of the Future" includes mobile ordering, self-ordering kiosks, and other features. The McDonald's app will also facilitate personalized offers and improved customer reviews. Expanded delivery service could also potentially drive upside. The one remaining issue was the fast-food chain's value offers, which were "confusing" and needed greater emphasis on price point. Goldman said McDonald's is finding a solution, which includes more regional value. McDonald's shares are up 0.6% in premarket trading, and up 16% for the year to date. The Dow Jones Industrial Average is up 6% for 2017 so far.

Continue Reading Below

Copyright © 2017 MarketWatch, Inc.