Analyst Andy Barish of Jefferies reiterated a Sell rating on Starbucks (SBUX – Research Report), retaining the price target of $76.00.
Andy Barish has given his Sell rating due to a combination of factors impacting Starbucks’ financial outlook. He expresses concerns over the company’s same-store sales (SSS) projections, which he believes are overly optimistic, particularly in the second quarter. As ticket growth is anticipated to slow in the latter half of the year, Barish questions the pace of recovery and the potential for earnings strength in the coming fiscal years.
Additionally, Barish highlights challenges related to margin pressures, driven by increased staffing hours and wages in a significant portion of U.S. stores. These factors, combined with the absence of previously expected supply chain savings, contribute to a tougher margin environment. Barish also notes that the current valuation of Starbucks’ stock already reflects much of the anticipated long-term recovery, suggesting that the stock’s upside potential may be limited. Consequently, he maintains a price target of $76, which he believes is more aligned with the company’s projected earnings and valuation metrics.