Strategic Initiatives and Growth Potential Drive Buy Rating for Starbucks

Sara Senatore, an analyst from Bank of America Securities, maintained the Buy rating on Starbucks (SBUX – Research Report). The associated price target remains the same with $101.00.

Sara Senatore has given her Buy rating due to a combination of factors that reflect Starbucks’ strategic initiatives and growth potential. Starbucks is enhancing its service experience by increasing labor hours in approximately 80% of its stores, which has already shown positive transaction growth in the initial phase of its ‘Green Apron Service’ initiative. Additionally, the company is taking a cautious approach to expansion by slowing down growth to focus on store evaluations and redesigns, which aim to improve customer experience and reduce costs.
Moreover, Starbucks is implementing a disciplined financial strategy by prioritizing essential investments and cutting unnecessary expenses, such as pausing certain equipment rollouts. The company is also leveraging innovation in its beverage and food offerings to drive growth, particularly in the afternoon segment. Despite challenges in the Chinese market, Starbucks remains committed to growth opportunities there, considering partnerships to mitigate risks. These strategic moves, alongside a favorable price objective, underpin Senatore’s Buy rating.

According to TipRanks, Senatore is a 4-star analyst with an average return of 6.1% and a 53.74% success rate. Senatore covers the Consumer Cyclical sector, focusing on stocks such as Yum! Brands, Domino’s Pizza, and Texas Roadhouse.

In another report released on May 16, Evercore ISI also reiterated a Buy rating on the stock with a $95.00 price target.