Starbucks (SBUX) Estimate Raised at RBC Capital

RBC Capital analyst David Palmer raised estimates on Starbucks (NASDAQ: SBUX) while reiterating an Outperform rating and price target of $64.00. The firm notes mobile adoption is acclerating.

"We reiterate our $64 price target and our FY15E EPS estimate of $1.58 (+19% YOY; cons. $1.58). Additionally, we are raising our FY16 EPS estimate from 1.89 to $1.94 (+22% YOY; cons $1.87) to account for an extra week in F4Q16, which we believe will add $0.05-$0.06 to FY16 EPS, though our FY17 EPS estimate remains at $2.23 (+15% YOY; cons $2.18). Our view remains that innovation in beverages, food, and technology should sustain sales momentum that, when combined with a benign input cost environment, is enabling further investment in labor, productivity, technology, and brand development (e.g., Starbucks Reserve; Teavana) and should fuel sales and earnings momentum over the long term."

Based on the firm's study, mobile payment accounted for over 20% of sales in August--a 900bp increase over the last year and, in their view, a strong indication, of the rapid adoption of the company's Mobile Order & Pay (MO&P) initiative.

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 $56.29 yesterday.

You May Also Be Interested In

• Growth isn't weak enough to truly undercut inflation pressures - BMO
• Marsh & McLennan (MMC) PT Raised to $195 at Keefe, Bruyette & Woods
• HSBC Downgrades Feng Tay Enterprises (9910:TT) to Hold