Oppenheimer Believes Starbucks Corp (SBUX) Won’t Stop Here

Oppenheimer analyst Brian Bittner reiterated a Buy rating on Starbucks Corp (SBUX) today and set a price target of $81. The company’s shares closed yesterday at $75.12, close to its 52-week high of $76.95.

Bittner commented:

“With SBUX climbing above our price target, we were forced to re-evaluate our model and investment thesis. Interestingly, our analysis highlights EPS upside in ’19E— specifically into second-half as margins gain health against low Street forecasts. This is a rarity in our universe and allows us to reiterate our Outperform, particularly ahead of an accelerating earnings scenario we envision in ’20E. We remain confident in drivers behind healthy SSS, but recognize that multiple expansion is difficult to justify in near-term (from 25x forward P/E). We’d remain aggressive on valuation-led pullbacks and raise our estimated EPS and price target to $81 (from $72).”

According to TipRanks.com, Bittner is a top 100 analyst with an average return of 11.7% and a 71.0% success rate. Bittner covers the Services sector, focusing on stocks such as Restaurant Brands International, Jack In The Box Inc, and Cheesecake Factory.

The word on The Street in general, suggests a Moderate Buy analyst consensus rating for Starbucks Corp with a $72.54 average price target, implying a -3.4% downside from current levels. In a report issued on April 11, Mizuho Securities also reiterated a Buy rating on the stock with a $75 price target.

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Based on Starbucks Corp’s latest earnings release for the quarter ending December 31, the company reported a quarterly net profit of $761 million. In comparison, last year the company had a net profit of $660 million.

Based on the recent corporate insider activity of 46 insiders, corporate insider sentiment is negative on the stock.

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Starbucks Corp. engages in the production, marketing, and retailing of specialty coffee. It operates through the following segments: Americas; China/Asia Pacific (CAP); Europe, Middle East, and Africa (EMEA); and Channel Development.

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