Wells Fargo Starts Starbucks (SBUX) at Market Perform; Freshly Brewed Growth Story

Wells Fargo initiates coverage on Starbucks (NASDAQ: SBUX) with a Market Perform. Valuation range $37-39.

Wells analyst says, "Overall we are very impressed with Starbucks’ expansive
retail footprint, its leading Starbucks brand franchise, and SBUX’s notable
growth. As Starbucks embarks on a new era of growth, we are cautiously
optimistic that SBUX will successfully execute its strategy to (1) improve samestore sales (SSS) in the United States, (2) expand internationally, and (3) build a consumer packaged goods (CPG) business. Conceptually we believe Starbucks’ CPG strategy is sound, leveraging the strength of the Starbucks’ brand and creating a sampling device in its stores. However, we believe there will be a period of transition and we have some concerns that SBUX may have difficulty achieving a critical level of scale. Overall, we characterize 2011 as a transitional year for SBUX and believe the stock is fairly valued. Therefore, we recommend investors wait on the sidelines for a better entry point and/or increased visibility that SBUX is successfully executing on its three pillars of growth."

For more ratings news on Starbucks click here and for the rating history of Starbucks click here.

Shares of Starbucks closed at $35.79 yesterday.

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Wells Fargo Upgrades Neurocrine Bio. (NBIX) to Overweight 'as the Company is Knocking on the Doors of the Large-Cap Club'
• DAM Capital Starts Apollo Tyres (APTY:IN) at Buy
• Bernstein SocGen Group Starts General Motors (GM) at Outperform