Starbucks dips after Jefferies moves to the ratings sidelines
JohnFScott/iStock Unreleased via Getty Images

Jefferies turned cautious on Starbucks Corporation (NASDAQ:SBUX) on Wednesday with a downgrade on the coffee store operator to Hold from Buy ahead of the expectation for a recession in the 2023-2024 time period.
Analyst Andy Barish and team expect SBUX shares to trade in a narrow range after relative outperformance in 2022 since the year-to-date low was hit in May. Underpinning the outlook on SBUX, a choppy recovery is seen for China and macro pressures in the U.S. are anticipated to continue to build.
"We lower our U.S. SSS ests to account for this via negative transaction growth, although it may come in the form of softer avg check as well, which has been significant in the form of price, premiumization, cold, and modifiers. Our FY23/24 U.S. SSS ests are 7%/5% vs guide 7-9% in each year and Cons 8%/6%," updated the firm.
A notable risk seen for Starbucks (SBUX) in the year ahead is that management set expectations for global growth too high at its recent Investor Day.
Jefferies assigned a price target of $100 to SBUX vs. the average analyst PT of $100.86 and the 52-week trading range of $68.39 to $117.80.
Shares of SBUX fell 1.02% in premarket action on Wednesday to $97.00 and still sit above their 50-day, 100-day, and 200-day moving averages.