Deutsche Bank Starts Starbucks (SBUX) at Buy, 'A Grande Long-Term Story'

Deutsche Bank analyst Lauren Silberman initiates coverage on Starbucks (NASDAQ: SBUX) with a Buy rating and a price target of $118.00.

The analyst comments "We initiate coverage of Starbucks (SBUX) with a Buy rating and $118 target price. SBUX is likely one of the more controversial stocks in our coverage, with debates around long-term guidance, US SSS and the China outlook. We believe SBUX is well positioned to deliver on its 15-20% EPS growth algorithm, and while we recognize concerns that top-line guidance is ambitious, we believe 7-9% SSS could provide margin opportunity above what we think is embedded in the guide, and thus see 15-20% EPS growth as sufficiently achievable without 7-9% SSS. We view SBUX as one of the highest quality growth companies in restaurants, with 10-12% revenue growth, margin expansion and repurchases supporting our ~19% 3-year EPS CAGR. Given our positive view on the near-term and long-term fundamentals and current valuation, we believe SBUX offers a favorable risk/reward."

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 $94.18 yesterday.

You May Also Be Interested In

• Deutsche Bank Starts Ardagh Metal Packaging S.A. (AMBP) at Hold
• Jefferies Downgrades Sunway Healthcare Holdings (SUNMED:MK) to Hold
• Jefferies Downgrades IDP Education (IEL:AU) (IDPUF) to Hold