RBC Capital cuts Starbucks to Sector Perform on balanced risk/reward

As previously reported, RBC Capital analyst Logan Reich downgraded Starbucks (SBUX) to Sector Perform from Outperform with a $105 price target citing more balanced risk-reward at current levels. RBC noted that permanent labor investments plus net cost savings over the next three years are “smaller than previously anticipated,” which implies further investments are required. Additionally, the firm noted that investor top-line growth expectations are “elevated, leaving less room for upside,” adding that the stock is “trading near peak historical multiple.”