Starbucks’ Strategic Initiatives and Growth Potential: A Buy Recommendation

Brian Harbour, an analyst from Morgan Stanley, maintained the Buy rating on Starbucks (SBUX – Research Report). The associated price target was lowered to $95.00.

Brian Harbour has given his Buy rating due to a combination of factors that highlight Starbucks’ strategic initiatives and potential for long-term growth. The company is undergoing a turnaround, which, although expected to take time, aims to enhance the customer experience and improve metrics such as throughput and brand health. These improvements are anticipated to eventually lead to better financial performance and earnings per share.
Furthermore, Starbucks is addressing its market strategy by expanding beyond dense coastal areas to regions with higher population growth, aiming to maintain its premium brand image. The company is also exploring strategic options in China to mitigate political risks and capitalize on market opportunities. Additionally, Starbucks is focusing on innovation, particularly in the afternoon menu and food offerings, which presents a significant opportunity for growth. These strategic moves, along with maintaining a strong balance sheet, underpin Harbour’s positive outlook on the stock.

Harbour covers the Consumer Cyclical sector, focusing on stocks such as Domino’s Pizza, Yum! Brands, and Wingstop. According to TipRanks, Harbour has an average return of 1.0% and a 57.55% success rate on recommended stocks.

In another report released today, Barclays also maintained a Buy rating on the stock with a $98.00 price target.