Starbucks Market Cap Could Soon Surpass McDonald’s. The coffee chain’s shares could rally 15% to 20% in 2016, making it the world’s biggest restaurant stock.

Barron's reports:

Sometime in the next year, Starbucks will likely become the world’s largest restaurant company based on market value, eclipsing McDonald’s $95 billion capitalization. The Golden Arches have been tarnished in recent years, but this impending milestone is testament largely to the success of Starbucks, whose shares have rallied 49% in the past 12 months, to $57.93. They could gain another 15% to 20% in the next 12 months as digital-payment services help to drive earnings growth.

The Seattle-based chain, with a market value of $86 billion, has become far more than a coffee shop, with breakfast, lunch, and snacks expanding the appeal of many of its 22,500 stores. Morning hours, which once represented close to 80% of Starbucks sales, now account for less than 50%, and some stores will soon add beer and wine.

The transformation is about more than food, however. These days, Starbucks has almost as much in common with Silicon Valley start-ups as it does with other restaurants. In the latest quarter, 20% of all U.S. Starbucks transactions were paid for via the company’s smartphone app, more than double the percentage two years ago.

Such digital progress has been hyped by U.S. retailers for years, but none has achieved similar success. By the end of the year, Starbucks’ U.S. customers will also be able to use the mobile app to order and pay for purchases in advance, reducing long lines at many Starbucks counters. Drinks and food will wait instead for the customer’s arrival.

Nothing stays the same when free market capitalism is allowed to work.