McDonald’s (NYSE:MCD) rallied to a new all-time high on Tuesday, while shares of Chipotle Mexican Grill (NYSE:CMG) sank after the fast-casual chain warned of heavy spending to come.
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Analysts at Cowen raised their price target for McDonald’s to $180 from $142, noting that the iconic restaurant plans to replace some cashiers with self-service kiosks by the end of the year. Cowen also lifted its same-store sales estimate to 3% growth from 2%.
McDonald’s “Experience of the Future” renovations will reach 2,500 locations in 2017, according to Cowen. The initiative includes kiosks that allow customers to place orders, in addition to table service and dessert counters.
Shares rose 0.7% to $154.23 in recent trading. McDonald’s climbed to $155.28, a record high.
Rival Chipotle didn’t fare as well, falling nearly 7%. In a regulatory filing, Chipotle issued a warning that second-quarter expenses are on pace to increase up to 0.3%, as the company looks to win back customers. Chipotle plans to invest more money in marketing and promotions.
Chipotle was down 6.6% at $428.47 on Tuesday afternoon. The stock reached a three-month low.
Denver-based Chipotle hasn’t returned to its highs of 2015, when the chain had an E. coli outbreak in its restaurants.
FOX Business Network’s Charlie Brady contributed to this report.
|CMG||CHIPOTLE MEXICAN GRILL INC.||451.07||-3.76||-0.83%|