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.