Analysts at Stephens maintain an Equal-Weight rating on Starbucks Corporation (NASDAQ: SBUX)'s stock with an unchanged $58 price target after the coffee chain reported
its fiscal second-quarter
earnings report.
Stephens' Will Slabaugh commented in a research report that Starbucks'
earnings per share of $0.45 was a penny better than expected, while Americas same-store-sales growth of 3.0 percent matched his
estimate but fell short of the 3.5 percent the consensus estimate was calling for.
Americas In Review
Slabaugh noted Starbucks' food mix hit its highest mix ever since the launch
of the La Boulange. Food delivered 200 basis points, and beverages contributed another 100 basis points.
Starbucks' iced beverage platform has seen increased success through a double-digit growth coming from espresso beverages,
coffee and tea.
Slabaugh pointed out Starbucks' noted an acceleration of same-store sales growth at the end of the quarter in March and into
April; throughput and company initiatives positively impacted sales. As such, the company feels confident it can hit its target of
a mid-single digit comp growth throughout the fiscal year.
Starbucks also highlighted progress in peak transaction throughput in its mobile order and pay system. In fact, this is
beginning to improve previously softened sales but needs to be monitored closely as mobile order pay accounts for around 20 percent
of peak hour transactions.
Finally, the analyst acknowledged that investors have valid reason to be concerned about Starbucks' ability to demonstrate
improvements on the top-line but easing compares in the third and fourth quarter, along with momentum in product innovation may
limit downside in the stock.
Bottom line, Slabaugh remains positive on Starbucks' brand over the long term, but with the stock trading at 27x 2017 earnings
per share estimate, investors are better off waiting for a more attractive entry point.
In Friday's pre-market session, shares were down 4.5 percent at $58.54.
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Latest Ratings for SBUX
| Date |
Firm |
Action |
From |
To |
| Apr 2017 |
Stifel Nicolaus |
Upgrades |
Hold |
Buy |
| Mar 2017 |
Telsey Advisory Group |
Initiates Coverage On |
|
Outperform |
| Mar 2017 |
Wedbush |
Maintains |
|
Outperform |
View More Analyst Ratings for
SBUX
View the Latest Analyst Ratings
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