RBC Downgrades Starbucks Amid Growth Concerns
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Oct 13 2023
0mins
Should l Buy SBUX?
Starbucks Corp (SBUX) has seen its stock price decline by 4.14%, hitting a 20-day low, as broader market conditions weigh heavily on investor sentiment.
RBC Capital Markets downgraded Starbucks from 'Outperform' to 'Sector Perform', citing concerns that investor expectations for future growth are too high. Analyst Logan Reich maintained a price target of $105, indicating an 8% upside, but expressed doubts about the recovery of Starbucks' U.S. business and highlighted a lack of visibility on cost savings and margin improvements. This downgrade reflects a cautious outlook on the company's growth potential amid ongoing labor issues and elevated market expectations.
The downgrade may impact investor confidence, especially as Starbucks has been facing challenges in labor relations and competition in the coffee market. The company's ability to navigate these issues while maintaining its brand value will be crucial for its future stability.
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Analyst Views on SBUX
Wall Street analysts forecast SBUX stock price to fall
21 Analyst Rating
12 Buy
7 Hold
2 Sell
Moderate Buy
Current: 100.000
Low
59.00
Averages
96.12
High
115.00
Current: 100.000
Low
59.00
Averages
96.12
High
115.00
About SBUX
Starbucks Corporations is a roaster, marketer, and retailer of specialty coffee globally. Its North America segment includes the United States and Canada. Its International segment includes China, Japan, Asia Pacific, Europe, Middle East and Africa, Latin America, and the Caribbean. Its North America and International segments include both Company-operated and licensed stores. The Channel Development segment includes roasted whole bean and ground coffees, Starbucks-branded single-serve products, a variety of ready-to-drink beverages, such as Frappuccino and Starbucks Doubleshot, foodservice products, and other branded products sold outside the Company-operated and licensed stores. A large portion of its Channel Development business operates under a licensed model of the Global Coffee Alliance with Nestle, while its global ready-to-drink businesses operate under collaborative relationships with PepsiCo, Inc., Tingyi-Ashi Beverages Holding Co., Ltd., Arla Foods amba, Nestle, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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