Starbucks (SBUX) is seeking the right to put its name on a sports stadium or training facilities, according to a CNBC report. The coffee chain filed for the stadium naming rights with the U.S. Patent and Trademark Office on June 2.
The company said in the filing that it intends to use its name to promote business, sports, and entertainment events. However, the company declined to discuss its plans beyond the filing, according to the report.
If Starbucks secures the approval for the stadium naming rights, it would join corporations such as Amazon (AMZN), FedEx (FDX), and Barclays (BCS) that have used their brands on stadiums and arenas. (See Starbucks stock analysis on TipRanks)
Companies put their names on sports venues to drive brand awareness and secure fan loyalty. But stadium sponsorship does not come cheap. For example, e-commerce and cloud computing provider Amazon spent anywhere between $300 million and $400 million last year for the rights to name a Seattle arena Climate Pledge Arena, according to the CNBC report.
BMO Capital analyst Andrew Strelzik reiterated a Buy rating on Starbucks stock and raised the price target to $125 from $120. The analyst’s new price target implies 11.05% upside potential.
Strelzik observed that Starbucks’ sales should continue to improve even though margin targets still look conservative. The analyst noted a recovery in Starbucks’ U.S. business where two-year comps rose 6% above pre-pandemic levels. However, the international business is still sluggish, with sales in places like China falling short of expectations.
Consensus among analysts is a Moderate Buy based on 14 Buys and 10 Holds. The Starbucks average analyst price target of $125.09 implies 11.13% upside potential to current levels.
SBUX scores a 9 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.