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Starbucks slides as Wall Street worries its run out of room to grow



starbucks ceo kevin johnson
CEO Kevin Johnson presents during the Starbucks 2016 Investor Day
meeting, in New York, Wednesday, Dec. 7, 2016.

Associated Press/Richard

  • Piper Jaffray cut it’s price target for Starbucks
    to $53 from $60.
  • The firm is worried US sales growth could be stalling,
    and says the stock will remain range bound until trends
  • Shares of Starbucks fell about 1.8% in trading
    Wednesday following the downgrade. 

  • Follow Starbucks’ stock price in real-time

slid 1.8% in trading Wednesday after Piper Jaffray cut its
recommendation to “neutral” from “overweight,” citing a slowdown
in US same-store sales.

“We believe the stock is range bound at best until U.S. trends
improve,” analyst Nicole Miller Regan wrote in a note sent out to
clients  on Wednesday,
per CNBC
. “Our perspective is that there are issues around
inconsistent results, credibility of guidance, and management

Piper’s new price target is $53 a share — down from $60 in June,
and $70 for the better part of 2017. Wall Street’s average target
if $58, according to Bloomberg data.

In its most recent earnings report in July, Starbucks
same-store sales around the world rose just 1%
. China — where
the chain has been growing the quickest — saw sales slip to 2%.

“I want to be clear that we have 100 percent confidence in our
growth strategy and the sustainability of the leadership position
we have built in the market,” CEO Kevin Johnson told analysts on
a conference call following the report.

Still, Wall Street remains concerned.

“To sustain improvement in comps, Starbucks must
execute on its key digital initiatives to expand relationships
and drive transaction growth,” Fitch, one of the largest
financial rating agencies, said earlier this month.

Starbucks on Wednesday confirmed Business Insider’s previous
reporting that the
Pumpkin Spice Latte, a fall favorite, will return on August 28
this year — its earliest launch ever
— perhaps in a bid to
increase check size and bring the same-store sales number back to
where Wall Street would like.

Starbucks shares are down 7.8% this year.

Starbucks stock price



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