Starbucks (SBUX – Research Report), the Consumer Cyclical sector company, was revisited by a Wall Street analyst today. Analyst Andy Barish from Jefferies upgraded the rating on the stock to a Hold and gave it a $76.00 price target.
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Andy Barish has given his Hold rating due to a combination of factors impacting Starbucks’ current market position. The stock has seen a significant decline of 29% since its peak in February, which aligns closely with the price target of $76, suggesting limited short-term downside. However, Barish notes that the company’s fundamental turnaround is expected to take longer than the market anticipates, with additional risks stemming from tariff-related complexities.
Furthermore, the recent underperformance of Starbucks’ stock highlights uncertainties regarding near-term earnings, exacerbated by consumer unpredictability and potential inflation from tariffs. The company’s cultural and operational challenges are expected to take time to address, and upcoming financial quarters may not meet expectations, potentially affecting future earnings estimates. Despite these challenges, the stock’s current valuation is considered fair, trading at a multiple that has historically been a bottom during challenging periods, justifying the Hold rating.
In another report released on April 7, Robert W. Baird also downgraded the stock to a Hold with a $85.00 price target.