Starbucks Back To Business In Japan Today

Starbucks Coffee Japan (SBUX) is reopening many of its stores in Japan today, including in Tokyo, reports Reuters.

However, many of SBUX’s 1,550 Japan stores will only offer take-out and drive-through services to protect the health and safety of customers and employees.

In 2015 Starbucks Coffee Japan became a wholly-owned subsidiary of Starbucks.

Earlier this month Starbucks revealed that it expects more than 90% of its US stores to reopen by early June, with modified operations and hours.

Analysts currently hold a cautiously optimistic outlook on SBUX shares with a Moderate Buy consensus. This is based on 10 recent buy ratings vs 11 hold ratings. Meanwhile the $80 average analyst price target only indicates upside potential of 5%, despite a 13% drop year-to-date. (See Starbucks stock analysis on TipRanks).

“While near-term sentiment likely remains solid as store base reopens, we look for a pullback into the $60s to become more aggressive on our Outperform rating” writes Oppenheimer analyst Brian Bittner.

He has a buy rating on the stock with an $85 price target (12% upside potential).

According to Bittner, the Street’s forecast for full restoration in unit economics by 2021 appears aggressive- and he remains below the Street through next fiscal year on revenue, margins and EPS.

“In the near term, investor sentiment likely tracks SBUX’s plans to re-open units, US states easing lockdowns and the overall receding of the virus. Our work suggests a more difficult setup against Street expectations when investors’ focus turns towards the economics of the recovery” the analyst concludes.

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