Wolfe Research Turns Neutral on Starbucks (SBUX) amid Competitive Coffee Market

Starbucks Corporation (NASDAQ:SBUX) is included among the 14 Best American Dividend Stocks to Invest in.

Copyright: buschmen / 123RF Stock Photo

On March 9, Wolfe Research analyst Greg Badishkanian downgraded Starbucks Corporation (NASDAQ:SBUX) to Peer Perform from Outperform after assuming coverage of the stock. The analyst did not set a price target. While “green shoots” are emerging from the company’s turnaround, Wolfe wants to see evidence of sustained execution, the analyst told investors in a research note. The firm also pointed out that Starbucks is facing a more competitive coffee landscape.

Starbucks’ well-known brand gives the company pricing power over rivals. Its global scale also brings efficiency advantages. Because of that scale, the company can charge higher prices while still benefiting from lower costs tied to operating such a large business. The company’s “Back to Starbucks” plan, introduced by CEO Brian Niccol, has started to show early progress.

Starbucks remains a large and recognizable business, and some investors believe its strongest years could still lie ahead. The company continues to expand its footprint and grow revenue over time. The stock can move with market cycles, but Starbucks remains a widely recognized destination for higher-end coffee drinks.

Starbucks Corporation (NASDAQ:SBUX) roasts, markets, and sells specialty coffee around the world. Its North America segment covers the United States and Canada. The International segment includes China, Japan, Asia Pacific, Europe, the Middle East and Africa, Latin America, and the Caribbean.

READ NEXT: