At Least One Analyst Was Impressed Following Starbucks' Investor Day

Wells Fargo’s Bonnie Herzog believes Starbucks Corporation SBUX's Investor Day highlights there is still meaningful opportunity for the company to continue its recent strategic focus.

Herzog reiterated an Outperform rating on the company, with a valuation range of $64–$66.

'Impressed And Confident'

“We came away from this year’s bi-annual Investor Day impressed and confident in SBUX’s ability to continue to deliver on its long-term targets and investors’ moderating expectations through strong execution against its largely unchanged strategy relative to its last Investor Day in 2014,” the analyst said.

Herzog sees the consistency of Starbucks’ strategy as a positive, especially given that the company appears to be executing despite recent headwinds, while the transition from Howard Schultz to Kevin Johnson as the CEO would become easier if the current strategy is largely sustained.

Long Runway Of Growth

The analyst also believes there remains significant opportunity for the company in packaged beverages, and there was a “long runway of growth,” driven by the premiumization of the Starbucks brand, new store openings, product innovation and the digital platform.

“We think SBUX’s strategy to elevate the overall brand through its premium Roastery/Reserve brands is a huge opportunity. Through these brands, SBUX is able to launch new innovation to eventually roll out to the broader store network,” Herzog stated.

This premiumization is expected to drive a re-acceleration in comp growth, along with margin expansion.

“We continue to remain impressed by SBUX’s leading digital platform and its ability to leverage its digital ecosystem to drive consumer engagement and increased traffic/ticket comps,” the analyst went on to say.

Starbucks announced that it intended to further expand its digital capabilities, with its My Starbucks Barista ordering system.

At last check, Starbucks shares were up 0.39 percent at $58.99.