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RBC Reiterating Outperform On Starbucks

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In a report published Monday, analysts at RBC Capital Markets have reiterated their Outperform rating on Starbucks Corporation (NASDAQ: SBUX). The price target has been maintained at $50. The analysts believe that a premium multiple is justified for the stock.

The EPS estimates for FY15 and FY16 have also been maintained at $1.57 and $1.84, respectively, along with the Americas same-store sales growth estimate of 5 percent, based on RBC Capital Markets' consumer panel analysis for March.

"Our FY15 EPS estimate is at the high end of the company's $1.55-$1.57 guidance range, and assumes slightly higher EPS growth during 2H/15. We believe favorable dairy prices and supply chain efficiencies will continue to provide a boost to EPS this year, while falling Arabica coffee prices are likely providing a window of opportunity for the company to lock in its needs for FY16," the analysts said.

Related Link: Here's Why Starbucks Looks Poised To Beat Earnings Expectations

Although the analysts have maintained F2Q estimates as well, they believe that there could be accelerated sales growth in F2H15 due to Starbucks' investments in technology. The investments are likely to "not only bolster near-term throughput, frequency, and check, but should also help maintain brand relevance over the long term," the analysts added.

Latest Ratings for SBUX

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

View More Analyst Ratings for SBUX
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Posted-In: RBC Capital MarketsAnalyst Color Reiteration Analyst Ratings


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