Analyst Zachary Fadem from Wells Fargo maintained a Buy rating on Starbucks and keeping the price target at $100.00.
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Zachary Fadem has given his Buy rating due to a combination of factors related to Starbucks’ strategic moves in China. The recent joint venture with Boyu Capital is seen as a significant milestone, offering long-term value to Starbucks by retaining a substantial stake and licensing revenue stream. This deal is expected to positively impact Starbucks’ earnings per share and operating income margin, providing a financial boost and removing uncertainties that previously affected investor sentiment.
Moreover, the joint venture structure allows Starbucks to maintain a presence in the rapidly growing Chinese market while optimizing its operations and financial performance. Despite recent challenges in China, such as economic headwinds and competition, Starbucks has shown signs of recovery with improving sales trends. These developments, coupled with cost-saving measures and a strategic focus on growth, contribute to a favorable near-term outlook for the company, justifying the Buy rating.
In another report released today, Barclays also maintained a Buy rating on the stock with a $95.00 price target.