Starbucks "buy," target price reduced - update

12.11.07 - UBS

NEW YORK, November 12 (newratings.com) - Analysts at UBS maintain their "buy" rating on Starbucks Corporation (SBUX). The 12-month target price has been reduced from $42 to $38.

In a research note published this morning, the analysts mention that the company?s share price has declined by 34% year-to-date. Starbucks? performance in the US has been impacted by unit-level capacity constraints, the absence of convincing brand-building initiatives, accelerating unit growth and Frappuccino and summer-related weakness, the analysts say. Over the last three years, the company?s unit growth accelerated by 7pp while same-store sales growth slowed down at the same rate, UBS adds.