Starbucks "buy," target price reduced - update

09.01.08 - UBS

NEW YORK, January 9 (newratings.com) - Analysts at UBS maintain their "buy" rating on Starbucks Corporation (SBUX), while reducing their estimates for the company. The target price has been reduced from $37 to $28.

In a research note published this morning, the analysts mention that the focus of Starbucks? CEO on accelerating global growth, slowing down store growth and improving innovation is likely to improve visibility into the company?s long-term performance. The downward revision in the target price reflects the near-term uncertainty resulting from potential reinvestments and macro concerns, the analysts say. The EPS estimate for FY08 has been reduced from $1.05 to $1.02 to reflect the marginally negative US traffic trends in 1H08 and continuing cost pressures.