Starbucks A New Neutral At Credit Suisse

In a report published Tuesday, Credit Suisse analyst Jason West initiated coverage of Starbucks Corporation SBUX at Neutral with a $97 price target, urging investors to be "cautious" following a "remarkable run" in share prices.

According to West, Starbucks continues to execute at a "very high level" and offers a best-in-class growth among restaurant companies and retailers. However, the analyst noted that the recent rise in valuation and some growth headwinds justifies a Neutral stance.

West offered seven reasons why shares of Starbucks may struggle to outperform:

• Overall expectations may be too high.
• Margin gains could get tougher as the company makes strategic investments in digital and labor.
• Starbucks is losing a "sizeable" coffee tailwind this year that may be underappreciated.
• Same-store sales expectations in the "strong" mid-single-digits have set a high bar.
• Capital investments continue to rise, weighing on incremental returns.
• Foreign exchange headwinds may be "underappreciated."
• Loss of a key management member (Troy Alstead).

Starbucks has already issued 2015 guidance and said it expects to earn $3.09 to $3.13 per share in the fiscal year. West is modeling the company will earn $3.10 per share, $0.03 below consensus estimates and near the low end of the company's guidance.

While the company has established a reputation of exceeding or at the very least meeting the high end of the guidance, West wrote that "this year could be different."