Brean Capital Says Apple Pay Is A 'Work In Progress'

Brean Capital issued a technology industry update Wednesday with a focus on Apple Pay and some of the companies accepting the Apple Inc. (NASDAQ: AAPL) payment technology.

Analyst Tom Forte “conducted channel checks at more than 10 McDonald’s locations across four states and compared them against our visits to other retailers accepting Apple Pay to gauge the initial performance of the offering.

“Based on our experience, we believe the market for mobile payments remains wide open and that the service would be best described as a work in progress – we are encouraged by the initial list of retailers willing to try it, but their execution was erratic, and customer adoption is very limited.”

Forte noted in the firm’s October 2014 sector launch that the “most successful retailers will offer consumers the opportunity to pay for merchandise and services with their preferred currency and technology, not only with their debit and credit cards but also with Bitcoins and smartphones, as well as wearable connected devices (such as Google Glass and the Apple Watch). Our experience with Apple Pay is a reminder that the transition from the retail of today to the retail of the future may take a long time – years and not quarters.”

Forte believed EVINE Live Inc (NASDAQ: EVLV), HSN, Inc. (NASDAQ: HSNI) and Nordstrom, Inc. (NYSE: JWN) “are best positioned for today’s payment environment as they all offer consumers not only the ability to pay with debit or credit cards but also branded credits to drive customer loyalty.” The firm did not see ApplePay having any impact on sales for Groupon, Inc. (NASDAQ: GRPN) at this time.

The firm maintained Buy ratings on Evine Live with an $8 price target and Groupon with an $11 price target. HSN was also rated a Buy and the firm raised its price target from $74 to $80. Nordstrom was rated Hold.

Shares of all the above companies fell Wednesday expect for HSN, which recently traded at 76.40, up 0.90 percent.