McDonalds' foot-traffic data shows why analysts are lovin' it
Analysts at UBS are, as the Mickey-D's ($NYSE:MCD) slogan goes, lovin' it. And alternative data backs them up.
"We found consumers continue to have particularly favorable perceptions of the brand and are inclined to increase visits going forward," UBS analyst Dennis Geiger wrote Tuesday June 11, boosting the company's price target to $203 per share from $185 per share.
Foot Traffic Juggernaut
Here's what Facebook ($NASDAQ:FB) Were Here Count is: foot traffic metric that tracks the number of posts made at a location. Here's what it isn't: actual population. But to put McDonalds' sheer — and continuing — dominance of scale into perspective: if it were a country, it would rank right between Morocco and Saudi Arabia as 41st biggest nation in the world.
For a more accurate comparison, our next chart tracks the Facebook Were Here Count of McDonalds' biggest competitor in the US, Burger King ($NYSE:QSR), who clocks in with one-tenth the Were Here Count.
Data across industries or geographies may not be fully comprehensive; however, it can be used to gauge performance factors like staffing and sales.
McDonalds is delivering the goods — literally. Although UBS' report said the company would increase visits going forward, it's also likely McDonalds will be visiting consumers more often, thanks to partnerships with food delivery companies like Doordash ($DOORDASH), Postmates ($POSTMATES) and Uber Eats ($NYSE:UBER).
A report earlier this year pegged estimates for its restaurants participating in various delivery programs at around 50%, meaning that there is plenty of room to grow. And, with services like Uber expanding further into suburban and residential areas, it can be yet another rising source of revenue for a company that is virtually ubiquitous in North America.
McDonalds's stock has more or less traced the performance of the S&P 500 this year, and by Geiger's count, as well as our data, it could soon cross over this metric and outperform.
An average of analysts tracked by Zacks Investment Research are looking for EPS of $2.05 per share, which represents an increase over prior quarters, when it reports its next earnings July 25. Taking delivery orders through other companies' apps, and making revenue when franchisees make the food, translates into a revenue stream that takes pressure off McDonalds as a corporation...
And it could super-size margins too.