Starbucks: Balancing Growth Opportunities and Competitive Challenges in China and US Markets

DBS analyst Alison Fok maintained a Hold rating on Starbucks (SBUX – Research Report) today and set a price target of $78.00.

Alison Fok’s rating is based on Starbucks’ strategic positioning in both the Chinese and US markets amidst challenging economic conditions. In China, Starbucks is aggressively expanding its store count and investing in its digital ecosystem to capitalize on the growing coffee consumption. However, the company faces significant competition from local coffee and tea chains, which may pressure profitability.
In the US, Starbucks is focusing on enhancing store productivity and innovation, yet it contends with labor pressures and competition from niche coffee chains. The company’s partnerships with delivery services and growth in digital membership are positive signs, but the premium valuation compared to peers suggests potential downside risks. Consequently, the Hold rating reflects the balance between these growth opportunities and the competitive and economic challenges ahead.

Fok covers the Consumer Cyclical sector, focusing on stocks such as McDonald’s, Nike, and Li Ning Company. According to TipRanks, Fok has an average return of 7.8% and a 67.80% success rate on recommended stocks.

In another report released today, TD Cowen also maintained a Hold rating on the stock with a $90.00 price target.