Starbucks "neutral," target price reduced

31.01.08 - Robert W. Baird

NEW YORK, January 31 (newratings.com) - Analyst David E Tarantino of Robert W Baird maintains his "neutral" rating on Starbucks Corporation (SBUX), while reducing his estimates for the company. The target price has been reduced from $24 to $22.

In a research note published this morning, the analyst mentions that the company has posted its 1Q EPS in-line with the estimates. Starbucks has reduced its EPS guidance for FY08 to reflect poor domestic trends and costs on account of new initiatives. The company is undertaking initiatives to execute key operational challenges in a difficult scenario, the analyst adds. The EPS estimates for 2008 and 2009 have been reduced from $1.03 to $0.97 and from $1.22 to $1.13, respectively.