Starbucks Coffee (SBUX): Reiterate Outperform In The Face of Softer Sales - Piper Jaffray

Piper Jaffray analyst, Nicole Miller Regan, reiterated her Overweight rating on shares of Starbucks (NASDAQ: SBUX) after the company reported fiscal 3Q16 results driven by global comp of +4.0% (based on 4% ticket growth). She suggests buying shares at these levels based on proven global brand equity and an accelerating asset-light growth model, both of which generate strong cash flow in support of continued reinvestment into the business and an ongoing commitment to capital allocation.

No change to $72 price target based on 18x FY17E EBITDA. Our out-year projections through the FY19E period, continue to suggest a near doubling of earnings potential (vs. FY15's base of $1.58). She sees continued execution as the primary catalyst and notes that each 100 bps in same-store sales is worth ~$0.06 in EPS and each 1x in EBITDA multiple equates to ~$4/share.

For an analyst ratings summary and ratings history on Starbucks click here. For more ratings news on Starbucks click here.

Shares of Starbucks closed at $57.60 yesterday.

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