Starbucks "outperform," target price reduced - update

02.08.07 - RBC Capital Markets

NEW YORK, August 2 (newratings.com) - Analysts at RBC Capital Markets reiterate their "outperform" rating on Starbucks Corporation (SBUX), while reducing their estimates for the company. The target price has been reduced from $39 to $37.

In a research note published this morning, the analysts mention that the company has reported its F3Q EPS in-line with the estimates. Starbucks? US comp-store sales and traffic did not improve as much as was expected during the quarter, the analysts say. The company?s US margins contracted by 72bps, RBC Capital Markets adds. The EPS estimates for FY07 and FY08 have been reduced from $0.88 to $0.87 and from $1.09 to $1.07, respectively.