Starbucks lands overweight ratings from Wells Fargo ahead of earnings
JohnFScott

Wells Fargo initiated coverage on Starbucks (NASDAQ:SBUX) with an Overweight rating on Tuesday. The firm pointed to opportunities on the horizon via category tailwinds, best-in-class comparable sales growth, unit growth, operating margin recovery, and the China/global re-opening.
Looking down the road, the Starbucks 2023-2025 algorithm of high single-digit comparable sales growth and +15 to +20% EPS growth is seen as achievable despite general market skepticism.
"We see multi-year upside behind robust coffee fundamentals (+HSD% CAGR), global economic recovery/ re-opening (China, return to office, etc.) and gradual return to high-teens EBIT margins behind share gains, unit growth, and innovation," updated analyst Zachary Fadem.
Wells Fargo assigned a price target on SBUX of $120, which is 29X the FY24 EPS estimate.
Shares of Starbucks (SBUX) rose 0.12% premarket trading to $106.34.
Starbucks (SBUX) is due to report earnings on February 2. See the consensus estimates and earnings history.