Starbucks' Ambitious Plans Trigger 9% Price Target Hike By This Analyst

Morgan Stanley analyst John Glass reiterated an Equal-Weight rating on the shares of Starbucks Corp SBUX and raised the price target to $96 from $88.
The analyst said the company's Investor Day outlined ambitious but credible plans to revamp U.S. stores to accelerate sales growth.
The financial targets strike the analyst as achievable but ambitious and set a high bar that some may view as creating an overhang.
Also Read: 4 Starbucks Analysts React To Investor Day: 'Attractive Risk-Reward And Valuation'
The analyst anticipated acceleration in U.S. unit growth as the company seeks to meet demand and, importantly, expand its range of store formats to adapt to today's channel mix- these include drive-thru primary stores, delivery-only stores, and pick-up stores.
Same-store sales goal of the company seems possible but with seemingly little wiggle room for either execution or macro issues.
The analyst sees the company's initiative to invest in stores and operations as a key unlock for sales and labor productivity.
Unionization was addressed only briefly and remains a challenge, though not one that is worsening.
In the U.S., focusing on premium beverage innovation, customization, digital enhancements, and operational efficiencies should help the top line, though targets allow little room for error.
Price Action: SBUX shares are trading lower by 0.37% at $92.36 on the last check Thursday.
Photo Via Wikimedia Commons

Momentum69.52

Growth26.64

Quality-

Value20.63

Short

Medium

Long

Analyst Calendar