Starbucks downgraded to "neutral"

16.11.07 - Robert W. Baird

NEW YORK, November 16 (newratings.com) - Analysts at Robert W Baird downgrade Starbucks Corporation (SBUX) from "outperform" to "neutral," while reducing their estimates for the company. The target price has been reduced from $38 to $24.

In a research note published this morning, the analysts mention that the company has posted its F4Q EPS in-line with the estimates and consensus largely due to a lower-than-expected tax rate. Starbucks? domestic traffic declined sequentially due to possible company-specific factors and a hike in prices, the analysts say. The company has reduced its EPS growth guidance for 2008 from 20%-22% to 17%-21% or $1.02-$1.05. There are limited near-term catalysts for the company?s share price, Robert W Baird adds. The EPS estimate for 2008 has been reduced from $1.06 to $1.03.