Starbucks initiated with a Buy at Deutsche Bank

Deutsche Bank analyst Lauren Silberman initiated coverage of Starbucks with a Buy rating and $118 price target. The analyst believes Starbucks is well positioned to deliver on its 15%-20% earnings growth algorithm. While the firm recognizes concerns that Starbucks’ sales guidance is ambitious, it believes 7%-9% same-store-sales could provide margin opportunity above what is embedded in the guide, and thus sees 15%-20% earnings growth “as sufficiently achievable.” Deutsche views Starbucks as one of the highest quality growth companies in restaurants and sees a favorable risk/reward at current share levels.