McDonald's shares hit an all-time high on Tuesday as Wall Street expects sales to increase from new digital ordering kiosks that will replace cashiers in 2,500 restaurants.



Cowen raised its rating on McDonald's shares to outperform from market perform because of the technology upgrades, which are slated for the fast-food chain's restaurants this year.

McDonald's shares rallied 26 percent this year through Monday compared to the 10 percent return.

Andrew Charles from Cowen cited plans for the restaurant chain to roll out mobile ordering across 14,000 U.S. locations by the end of 2017. The technology upgrades, part of what McDonald's calls "Experience of the Future," includes digital ordering kiosks that will be offered in 2,500 restaurants by the end of the year and table delivery.



"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," Charles wrote in a note to clients Tuesday. "Our analysis suggests efforts should bear fruit in 2018 with a combined 130 bps [basis points] contribution to U.S. comps [comparable sales]."

He raised his 2018 U.S. same store sales growth estimate for the fast-food chain to 3 percent from 2 percent.



The analyst raised his price target for McDonald's to $180 from $142, representing 17.5 percent upside from Monday's close. He also raised his 2018 earnings-per-share forecast to $6.87 from $6.71 versus the Wall Street consensus 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," he wrote.



A McDonald's spokeswoman sent the following statement in response to this story:

"Our CEO, Steve Easterbrook, has said on many occasions that self-order kiosks in McDonald's restaurants are not a labor replacement. They provide an opportunity to transition back-of-the-house positions to more customer service roles such as concierges and table service where they are able to truly engage with guests and enhance the dining experience."

— CNBC's Michael Bloom contributed to this story.