Starbucks "buy," estimates reduced

27.06.07 - McAdams Wright Ragen

NEW YORK, June 27 (newratings.com) - Analysts at McAdams Wright Ragen reiterate their "buy" rating on Starbucks Corp (SBUX), while reducing their estimates for the company. The target price is set to $44.

In a research note published yesterday, the analysts mention that the company has indicated that it would be very difficult for it to meet the high end of its guidance for FY07 in view of rising dairy costs and sluggish transaction growth. The inclusion of salads and pasta to the lunch menu is expected to marginally boost Starbucks? comps growth, the analysts say. The EPS estimate for FY07 has been reduced from $0.90 to $0.88.