Starbucks Posts Q3 Beat: 2 Wall Street Takes

Starbucks Corporation SBUX shares are soaring one day after reporting a third-quarter earnings beat.

Stephens: Starbucks Maintaining Full Valuation 

Starbucks' third quarter came in ahead of what he considers a bullish view after posting 7% U.S. comps growth and Chinese same-store sales growth of 6%, Stephens analyst Will Slabaugh said in a Friday note. 

“Many initiatives appeared to come together in the quarter, including the acceleration of already-strong adoption of recent beverage innovation, clear improvements in monetization of MSR members, driving higher spend and frequency and what we now believe are tangible benefits of re-focusing employees on customer engagement,” the analyst said.

While the compares become more difficult, the third quarter puts many fears to rest in the near-term and likely helps Starbucks maintains what Slabaugh views as full valuation in a market that is rewarding scale and consistency..

Stephens maintained an Equal-Weight rating on Starbucks and raised the price target from $72 to $90.

Growth Outpaces KeyBanc's Expectations 

With an increasingly disruptive competitor emerging in China, Starbucks same-store sales growth was ahead of investor expectations, KeyBanc Capital Markets analyst Eric Gonzalez said in a Thursday note. 

The company’s same-store sales growth of 7% in the Americas was well ahead of KeyBanc's 4% target and was driven by solid beverage execution and rewards membership growth, the analyst said. 

KeyBanc maintained an Overweight rating and raised the price target from $84 to $105.

Starbucks shares were trading higher by 7.47% at $97.78 at the time of publication Friday.

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