Shares of Starbucks (NASDAQ:SBUX) opened lower on Wednesday, and are down about 0.8% in afternoon trading after the release of an analyst note.
Analyst Nick Seytan of Wedbush Futures downgraded Starbucks to “hold” today. This is the first time the analyst has downgraded the company, fearing that investors may be too optimistic about its sales. Seytan has decided to maintain his stock price target of $65, about 7% above Tuesday’s closing level of $60.92.
“Our recent checks of 5% of U.S. co-owned locations point to a modern acceleration in [the third quarter,]” Seytan said on Wednesday in a research note. “However, we expect overall [third-quarter] Americas comps in line to slightly below 5.3% consensus. We continue to model 5% for [the third quarter.]”
This downgrade comes during a losing streak for Starbucks, which has fallen for eight straight days. Shares of the coffee giant have fallen 5.6% over the past seven sessions, matching an earlier losing stretch ending on January 3, 2017. These two streaks are the longest for the company since a 10-day losing streak that ended November 14, 2008.
Before this losing streak, the stock had risen to an almost record close of $64.57 on June 3, rising 13% in 3 months. Starbucks’ stock gained because investors expected comparable store sales to rise.
SBUX remains a Zacks Rank #3 (Hold). The company has seen positive growth so far this year as shares have gained 8.9% in 2017. Our current consensus shows that Starbucks has positive EPS and sales growth for the current quarter, with earnings expected to gain over 12%.
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Starbucks Corporation (SBUX): Free Stock Analysis Report
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