Skip to Main

A Strengthening Model is Brewing

  • Oppenheimer & Co. Inc.
  • November 6, 2019

Maintaining Outperform Rating on Starbucks

Momentum is picking up for Starbucks, highlighted by accelerating 2-year traffic trends in the U.S. (and China). This appears the result of digital/loyalty tailwinds, impactful new products, and improved operations.

Coffee

In connection with Q4 (Sept.) results, Starbucks management initiated 2020 earnings per share guidance at a better range than we had expected, albeit a few pennies below the consensus highlighted in Oppenheimer Analyst's preview. Built into guidance are conservative same-store sales (SSS) assumptions at 3-4%. This is smartly consistent with the long-term outlook, but below where Oppenheimer Analysts believe the company is currently trending, which enhances the setup and our analysts reiterate outperform rating.

If you're a client and want to read the full report, including disclosures, you can log in and click on the Research tab.

Not a client and want to learn more? Reach out to an Oppenheimer Financial Advisor.