Starbucks stock target cut to $100 by Baird on near-term concerns

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Starbucks stock target cut to $100 by Baird on near-term concerns © Reuters.

On Monday, Baird adjusted its outlook on Starbucks Corporation (NASDAQ:), reducing the coffee giant’s price target to $100 from the previous $106, while maintaining a Neutral rating on the stock. The decision comes in the wake of comments from Starbucks management during a question-and-answer session earlier today, which followed up on last Wednesday’s Annual Meeting.

The firm cited a need for a more conservative stance regarding Starbucks’ financial performance for the second fiscal quarter (FQ2) and the second half of the fiscal year 2024 (2H24). In response to the company’s management remarks, Baird has revised its comparable store sales (comps) and earnings per share (EPS) estimates downwards for FQ2.

The firm’s analyst noted that while Baird holds a continued positive view of Starbucks’ long-term growth potential, there is a level of caution due to the near-term operating environment that could impact the company’s performance. This sentiment reflects the balance between the recognition of Starbucks’ enduring growth prospects and the immediate challenges it faces.

Starbucks, a leading global coffee retailer and roaster, has been navigating a dynamic and often challenging market environment. The adjustment in the price target is indicative of the nuanced view analysts are taking as they consider the company’s strategic direction and potential headwinds.

The revised price target and maintained rating suggest that while there may be hurdles in the short term, Starbucks’ growth trajectory remains intact over a longer horizon. The company’s shareholders and potential investors are thus provided with an updated perspective on its value and performance expectations.

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