Starbucks (SBUX) an Ultimate $100B Market Cap Stock, Piper Jaffray Says; PT Raised to $100
- Wall Street ends week positively; S&P 500, Dow hit record highs
- Bitcoin (BTC) Drops 3% as Turkey Bans Cryptocurrency Payments Citing Lack of Regulatory Supervision
- Morgan Stanley (MS) Archegos-Related Loss Appears to be $911M
- Dollar at 4-week low on retreating Treasury yields
- J&J (JNJ) Privately Asked Rival Covid-19 Vaccine Makers to Inspect Clotting Risks, AstraZeneca (AZN) Said Yes but Pfizer (PFE) and Moderna (MRNA) Declined - Report
Piper Jaffray analyst Nicole Miller Regan reiterated an Overweight rating and boosted her price target on Starbucks (NASDAQ: SBUX) to $100.00 (from $90.00). After looking at both the bull and bear thesis, the analyst said the 'horns" win it and she sees the stock as an ultimate $100 billion market cap opportunity.
"Starbucks remains an elite global consumer brand with highly attractive core business fundamentals that allow for substantial future growth opportunities across its portfolio," Regan said. "From a stock perspective, SBUX shares are favorably positioned within our “Next Layer” theme work whereby we identify the perfect “recipe” for a restaurant stock as one that combines Brand Equity + Asset-Light Growth + High Margin Licensed Sales. Further, the company’s strong cash flow generation support continued reinvestment into the business and an ongoing commitment to capital allocation."
1. Four Years to $100 Billion Market Cap:
- Americas: +MSD% Comp Momentum
- EMEA: Improving Margins
- CAP: Accelerating Development
- CPG: Market Share Gains/Margin Leverage
2. Leverage Core Product & Brand Appeal:
- Productivity Growth: Technology, Processes
- Platform Growth: Beverage, Food
- Daypart Growth: Non - Peak Morning
3. Barriers to Entry:
- Human Capital Investments
- Investments Around Loyalty and Payment Technology
4. Attractive Valuation:
- Core Retail Segment: 15x EV/EBITDA
- Channel Development Segment 19x EV/EBITD
1. Recent Stock Underperformance:
- Suggests Downside Potential Should Positive Trends Reverse as Stock is Not Getting Credit for Current Performance
- Perennially Underutilized Balance Sheet
2. Maturation of Core Market:
- Domestic Market Needs to Slow Growth, Risk of Cannibalization, Store Closures and/or Comp Slowdown
3. Persistent COGS Headwinds:
4. Unattractive Valuation:
- P/E Based
Shares of Starbucks closed at $79.70 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Siemens AG (SIE:GR) (SIEGY) PT Raised to EUR170 at Jefferies
- Seven Group Holdings Limited (SVW:AU) (SVNWF) PT Raised to AUD27.50 at Credit Suisse
- Lanxess AG (LXS:GR) (LNXSF) PT Raised to EUR61 at Morgan Stanley
Create E-mail Alert Related CategoriesAnalyst Comments, Analyst PT Change, Hot Comments
Related EntitiesPiper Jaffray, Nicole Miller Regan
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!