Citi Updates Starbucks Corporation (NASDAQ:SBUX) Outlook, Analysts Anticipate Challenges Ahead
Citi has slightly increased its price target for Starbucks Corporation to $99.00, with a Neutral rating, citing potential challenges in the upcoming fourth quarter. Analysts are wary of softness in U.S. comparable store sales, weaker performance in China, negative EPS growth, and revised long-term guidance. Investors are bracing for a lack of detailed guidance for fiscal year 2025 and strategies to address global challenges.
The stock has surged 25% in the past three months, but without clear EPS base or long-term guidance, analysts warn of unfavorable risk-reward scenarios. Recent developments include Starbucks' expansion in coffee research and development, labor union actions, and varied analyst perspectives on the stock.
InvestingPro data supports Citi's cautious stance, with valuation concerns and premium trading relative to earnings growth potential. Despite this, Starbucks maintains a strong market position with a market capitalization of $108.88 billion and revenue of $36.48 billion in the last twelve months. The company is a prominent player in the Hotels, Restaurants & Leisure industry.
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