In a report released yesterday, Andrew Charles from TD Cowen maintained a Buy rating on Starbucks (SBUX – Research Report), with a price target of $90.00.
Andrew Charles’s rating is based on a combination of factors that reflect both challenges and strategic initiatives at Starbucks. Despite a decrease in the price target from $102 to $90, the Buy rating is maintained due to the company’s commitment to its ‘Back to Starbucks’ plan, which focuses on improving service speed and enhancing marketing efforts. The introduction of the Green Apron service model, which has expanded significantly, is a key component of this strategy, aiming to optimize labor and improve customer experience by reducing service times.
Moreover, Starbucks is strategically managing its capital expenditures by slowing down store development and focusing on labor investments, which is expected to enhance operational efficiency. The company is also leveraging its brand’s premium heritage by resisting discounting, which has positively impacted the same-store sales mix. Additionally, Starbucks is actively innovating its menu, with new offerings like the Iced Horchata Oatmilk Shaken Espresso and plans for a health and wellness platform, which are anticipated to drive future growth.
In another report released yesterday, Stifel Nicolaus also maintained a Buy rating on the stock with a $92.00 price target.