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Brian Sozzi: Starbucks' Slowing Lines Lead To Disappointment

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In a report published Thursday, Belus Capital Advisors CEO and Chief Equities Strategist Brian Sozzi commented on Starbucks Corporation (NASDAQ: SBUX) earnings results.

On January 14, Belus downgraded shares of Starbucks from Buy to Hold. Belus' CEO Brian Sozzi noted that the results confirm his initial motives on downgrading the results. Sozzi commented, “One must show respect to comments by a founder not just collecting checks, rather he is very much still in the trenches daily. So when he notes fundamental shifts in how good are consumed that has to be appreciated, and it wasn't reflected in the stock's valuation. Looking through the report, that “seismic” shift (which amounts to another attempt to reset Street expectations) noted by the company this evening appears in another quarter of slowing Americas transactions sequentially.”

Sozzi added that Starbucks long lines may reduce customer's inclination to purchase drinks that take longer to make and items that need to be heated. Sozzi remarked that this may influence transaction value in the United States and globally. Sozzi further wrote that U.S. demand trends would have to become more transparent before considering an upgrade to Buy.

Shares of Starbucks closed at $73.39 on Thursday.

Latest Ratings for SBUX

DateFirmActionFromTo
Nov 2017Morgan StanleyMaintainsOverweight
Nov 2017UBSMaintainsBuy
Nov 2017BMO CapitalMaintainsMarket Perform

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Posted-In: Belus Capital Advisors Brian SozziAnalyst Color Earnings News Analyst Ratings

 

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