BTIG Affirms Starbucks (SBUX) at 'Buy'; Loyalty Transition Driving Better-than-Expected Traffic Impact
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BTIG is out with commentary on Starbucks (Nasdaq: SBUX) following a presentation made last week. The firm reiterates its Buy rating and $64 price target on the stock.
Analyst Peter Saleh commented,
At a conference presentation in New York last week, management indicated that the traffic impact from the change in Starbucks Rewards would be (200) bps compared to the (100) bps impact previously discussed. While we stress this will not have any impact on comparable sales, it will impact the composition of traffic and average check and we believe investors should expect fairly modest traffic results in the Americas segment in coming quarters. Given expected sales results (4QF16 Americas comp is expected to be 5.0%) and the greater traffic impact, we believe Americas traffic could be flat to slightly negative this quarter and remain flat to slightly positive until the program change is lapped. We are not making any changes to our comp estimates, rather highlighting the impact of this dynamic.
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