Starbucks’ (SBUX) soft same store sales growth in H1 may continue to put pressure on the company’s shares until there is improved visibility in H2, Wedbush said in a note Thursday.
Wedbush said it believes that the company’s current valuation aligns with the lower end of management’s long-term targets, considering company-specific factors, on one hand, and “declining visibility into the impact of macro headwinds on near- and medium-term U.S. and International SSS growth rates,” on the other.
Same store sales growth for fiscal Q1 is likely to be slightly below to in-line with consensus of 6.2%, the note said.
Wedbush lowered its estimate for fiscal Q1 Americas SSS growth to 5% from 6%, and also lowered fiscal-year 2024 Americas SSS growth estimate to 5.3% from 5.5%, the note said.
The firm maintained Starbucks’ operating margin estimate for 2024 at 16.9%, which is slightly below the consensus of 17%, and also revised down its 2024 earnings per share estimate to $4.13 from $4.14, according to the note.
Wedbush maintained the company’s stock at neutral and lowered its price target to $95 from $100.