Starbucks, the Consumer Cyclical sector company, was revisited by a Wall Street analyst today. Analyst Zachary Fadem from Wells Fargo maintained a Buy rating on the stock and has a $105.00 price target.
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Zachary Fadem has given his Buy rating due to a combination of factors that highlight Starbucks’ potential for growth and innovation. One of the key drivers is Starbucks’ entry into the protein-enhanced beverage market with the launch of its new Protein platform. This initiative is expected to capitalize on the growing consumer trend towards protein consumption, potentially expanding Starbucks’ customer base and increasing its total addressable market.
Additionally, Fadem points out that the restructuring efforts, including store closures and corporate workforce reductions, are set to significantly reduce operating expenses, thereby offsetting labor investments. Despite short-term challenges like flat comparable sales and rising coffee prices, the long-term strategic initiatives, including new product innovations and store remodels, are seen as positive steps towards a successful turnaround. If the protein initiative proves successful, it could enhance investor sentiment and positively impact future earnings, supporting the Buy rating.
In another report released on September 26, Stifel Nicolaus also reiterated a Buy rating on the stock with a $105.00 price target.