Starbucks Coffee (SBUX): Consumer Panel Confirms 5% SSS Leading to Below Consensus EPS - RBC
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RBC Capital analyst, David Palmer, reiterated his Outperform rating on Starbucks (NASDAQ: SBUX) after his proprietary consumer panel confirmed his 5% SSS estimate for F4Q. This is in line with the company commentary that it would likely return to 5% SSS growth. The analyst believes this result would represent a two-year acceleration in sales and ease fears of an ongoing rapid deterioration in the business. Last quarter, Americas SSS growth slowed to 4% versus 7% SSS the quarter before.
The analyst's 2017 EPS estimate of $2.15 (+14% YOY; cons. $2.17) assumes ongoing partner wage investments and incorporates a 53-week year (2pp headwind) in FY16. No change to the price target of $68.
Shares of Starbucks closed at $54.71 yesterday.
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