Starbucks "neutral," target price reduced

24.04.08 - Robert W. Baird

NEW YORK, April 24 (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 $20 to $17.

In a research note published this morning, the analyst mentions that the company has posted its preliminary 2Q EPS significantly short of the consensus, reflecting costs associated with transformation initiatives and weak domestic comps. Starbucks is implementing significant operational changes in an overall tough consumer spending environment, the analyst says. There are few catalysts for the company?s share price in the near term, Robert W Baird adds. The EPS estimates for 2008 and 2009 have been reduced from $0.97 to $0.83 and from $1.13 to $0.95, respectively.