fbpx
QQQ
-2.71
348.05
-0.78%
DIA
-5.86
344.51
-1.73%
SPY
-7.07
429.04
-1.68%
TLT
+ 2.69
140.35
+ 1.88%
GLD
-0.87
166.72
-0.52%

Starbucks Falls On Global Growth Concerns But Here's Why This Analyst Continues To See It As Best Reopening Play

April 28, 2021 2:54 am
Share to Linkedin Share to Twitter Share to Facebook Share to Print License More
Starbucks Falls On Global Growth Concerns But Here's Why This Analyst Continues To See It As Best Reopening Play

While shares of Starbucks Corp. (NASDAQ:SBUX) fell almost 2% in Tuesday’s extended trading session amid worries about the company’s international growth, Cowen Equity Research said the world’s largest coffee chain continues to be its favorite U.S. “reopening” stock. 

The Starbucks Analyst: Cowen analyst Andrew Charles maintained an Outperform rating on Starbucks stock and raised the price target to $126 from $120.

The Starbucks Thesis: The Cowen analyst sees room for Starbucks’ multiple expansion based on confidence in the U.S. economic recovery that should overshadow a potentially bumpier international recovery. He noted that Starbucks recorded second-quarter U.S. and Americas same-store sales growth of 9%, compared to the brokerage’s estimate for 8% growth.

According to the analyst, Starbucks’ addition of over 3.5 million members to the My Starbucks Rewards (MSR) loyalty program should manifest an upside to U.S. same-store sales for the foreseeable future. The analyst said the company’s U.S. strength should overshadow its international sales shortfall.

See Also: Why This Strategist Says Starbucks Has The Most Upside In Restaurant Space

Starbucks International Growth Worries: Nevertheless, worries about a slower recovery in some international markets amid the uneven global economic recovery weighed on Starbucks’ shares on Tuesday.

The Seattle-based coffee chain reported mixed results for the second quarter on Tuesday, with earnings topping analysts’ expectations and revenue missing estimates. In addition, the company raised its full-year forecast for earnings and revenue.

Starbucks' international sales growth of 35% trailed Cowen’s estimate for 46% growth, as a rebound in China was overshadowed by weakness in some international markets due to the pandemic. However, the growth in China also trailed analysts’ estimates due to increased government restrictions on mobility in response to a spike in coronavirus infections in the middle of the quarter.

Price Action: Starbucks shares closed 0.2% higher in Tuesday’s regular trading session at $116.15, but declined 1.7% in the after-hours session to $114.16.

Read Next: Oatly, Vegan Milk Maker Backed By Oprah, Files For US IPO: What You Need To Know

For the latest in financial news, exclusive stories, memes follow Benzinga on Twitter, Facebook & Instagram. For the best interviews, stock market talk & videos, subscribe to our YouTube channel.


Related Articles

Starbucks Gets Cowen Upgrade On Expectations Of Footfalls Reaching Pre-Pandemic Levels: What You Should Know

The world’s largest coffee chain Starbucks Corp’s (NASDAQ: SBUX) customer visitation is expected to go back to pre-COVID-19 levels for when the vaccine is widely available, according to a survey conducted by Cowen Equity Research. read more

Is Now The Time To Buy Starbucks Stock? 6 Analysts Weigh In On Drop

Starbucks Corporation (NASDAQ: SBUX) reported Tuesday afternoon with mixed fiscal first-quarter results highlighted by a 5% U.S. same-store sales decline. read more

Starbucks' Recovery Looks 'Durable,' Cowen Says In Upgrade

Coffee chain Starbucks Corporation (NASDAQ: SBUX) is showing signs of a "durable" recovery, according to Cowen.  The Starbucks Analyst: Andrew Charles upgraded Starbucks from Market Perform to Outperform with a price target lifted from $77 to $99. read more

Cowen Downgrades Starbucks Due In Part To Poor Sales Of Gift Cards, Craft Coffee