Starbucks initiated with "neutral weight"

18.01.07 - Prudential Financial

NEW YORK, January 18 (newratings.com) - Analyst Howard W Penney of Prudential Financial initiates coverage of Starbucks Corporation (SBUX) with a "neutral weight" rating. The target price is set to $36.

In a research note published yesterday, the analyst mentions that the company is expected to continue to face significant expansion opportunities in the existing markets and generate growth in the new markets globally. Starbucks reported an EPS growth of 113% in FY03-FY06 partly on account of robust growth and above-trend same-store sales growth at its new units, the analyst says. The short-term increase in the costs of the commodity might exert pressure on the company?s margins going forward, Prudential Financial adds.