UPDATE: Credit Suisse Raises PT to $67 on Starbucks
Credit Suisse increases its price target from $56 to $67 on Outperform-rated Starbucks (NASDAQ: SBUX) as it updates estimates to reflect coffee deflation.
Credit Suisse notes, "SBUX already locked in F12 coffee costs at a reference price of ~$2.61, but, with spot prices holding in the sub-$2 range, we are adjusting our F13 and F14 ests for expected coffee deflation. We are now modeling F13 coffee costs off of a base spot price of $2.20 (down 16% YoY) and F14 flat with F13. Note that SBUX shouldn't see the full benefit of yesterday's prices in F13, as it started contracting F13 before the lows were reached. However, opportunistic contracting could mean another year of deflation in F14 and a tailwind to our F14 est."
SBUX closed at $58.66 yesterday.
(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.