- Oppenheimer updates on Starbucks (SBUX -9.2%) after hosting CEO Kevin Johnson and CFO Scott Maw at a consumer conference and factoring in the coffee chain's guidance update.
- "We acknowledge the model is underperforming the +3-5% long-term SSS target, but do see interesting drivers as new digital initiatives revitalize non-loyalty customers into F19/ F20," writes analyst Brian Bittner and team.
- "Margins could also improve as cost savings (particularly on G&A) become a bigger focus. At ~21x next year’s P/E, we keep our Outperform rating intact and will monitor execution closely."
- Oppenheimer lowers its FY18 EPS estimate to $2.41 and FY19 EPS to $2.67. The firm's 12-18 month price target on SBUX of $66 is 24.5X the 2019 EPS estimate.