McDonald's Corp. was upgraded to outperform from market perform at Cowen & Co. based on the company's potential for U.S. same-store sales growth. The price target was raised to $180 from $142. Analysts conducted a proprietary study that found value perceptions compared with other fast-food restaurants started to improve in September 2016. At that time, McDonald's began pushing a McPick 2 for $5 promotion, along with other discounts that were available exclusively through the smartphone app. McDonald's Experience of the Future initiative, which includes digital upgrades, are another plus, with analysts expecting 130 basis-point contribution to U.S. same-store sales. "We believe mobile ordering better supplements the drive-thru business where 70%-plus of U.S. sales are transacted," analysts wrote in a Tuesday note. "In our view McDonald's differentiation lies in the operational enhancements of mobile ordering that includes curbside pick-up of orders in order to not disrupt the drive-thru." McDonald's shares are up 1.1% in Tuesday trading, and up 27.2% for the year so far. The S&P 500 index is up 9.2% for the year-to-date.
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