Buy Starbucks (SBUX) Weakness, Say Deutsche Bank
Deutsche Bank maintained a Buy rating on Starbucks (NASDAQ: SBUX) with a price target of $70. Shares ticked lower following the release of Q1 results. Karen Short noted that expectations were very high and urged investors to take advantage of any weakness in the stock.
"We would argue that Starbucks' F1Q16 results (reported 1/21/16 A.M.C.) were once again top of the class. While the shares traded off A.M.C, as a result of more modest international SSS and lower than consensus F2Q16 guidance, expectations were very high. More importantly, SBUX continues to generate best-in-class SSS across the Americas (~70%+ of op. profits) and heavily invest in its labor and technology. Combining SBUX's solid sales results, its ability to invest for the future, even in the face of challenging macro, while reiterating its high-teens EPS growth target, it only serves to support our Buy rating and $70 price target. We would take advantage of any weakness in the stock," said Short.
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Shares of Starbucks closed at $59.03 yesterday.