CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We cut our 12-month target to $102 from $107, 25.2x our FY 24 (Sep.) EPS, below SBUX’s five-year average forward P/E of 31.2x. We trim our FY 24 EPS to $4.04 from $4.06 but raise FY 25’s to $4.65 from $4.63. SBUX posted FQ1 (Dec.) EPS of $0.90, $0.04 below consensus. Revenue of $9,425M (+8.2% Y/Y) was $200M below consensus. Operating income rose to $107M, with margin widening 130 bps Y/Y to 15.8%, in line with consensus. SBUX cut its FY 24 comp sales guidance, as U.S. traffic softened (+1% comp transactions). International also suffered from issues in the Middle East and a sluggish recovery in China, which heightened pricing competition (-7% comp average ticket). However, we’re positive on SBUX’s pricing power in the U.S. (+4% comp price growth), especially among loyalty customers, along with its initiatives to offset recent headwinds (i.e., Triple Shot Reinvention Plan, targeted U.S. offers, and locally relevant products in China). Nonetheless, we still expect macroeconomic challenges to persist near term.