CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We trim our 12-month target price to $107 from $110, 26.4x our FY 24 (Sep.) EPS, a discount to SBUX’s five-year average forward P/E of 31.2x. We raise our FY 24 EPS to $4.06 from $4.00 and we initiate FY 25 at $4.63. SBUX posted FQ4 (Sep.) EPS of $1.06, $0.09 above consensus. Revenue of $9,374M (+11.4% Y/Y) was $93M above consensus. Operating income grew 34.1% Y/Y to $1,707M, with margin expanding 310 bps Y/Y to 18.2% vs. the 17.3% consensus. SBUX exceeded expectations, with comp sales up 8% vs. the 7% consensus, on top of transaction growth across all major regions, including China. Despite SBUX’s clean beat, FY 24 EPS guidance was left unchanged and FY 24 comp sales guidance was revised down (mid-point at +6% from +8%). While we view SBUX’s reinvention plans and the U.S. as bright spots, SBUX’s growth expectations still seem overly optimistic. Moreover, we highlight the notable drop in China’s comp sales growth (-41 pts Q/Q to +5% Y/Y), along with the fading benefit of lapping sales and operating deleverage.