Starbucks Shares Gain as Barclays Joins Wall Street Chorus of Bullish 2020 Outlooks

Starbucks shares have barely budged over the past six months, but Wall Street analysts see upside potential for the world's biggest coffee chain in 2020.
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Starbucks Inc. (SBUX) - Get Report shares traded higher Thursday after analysts at Barclays boosted their rating and target price for the world's biggest coffee chain, adding to a growing list of bullish forecasts from Wall Street. 

Barclays analyst Jeffery Bernstein lifted his rating on Starbucks to 'overweight', from equal weight, and improved his price target by $17 to $107 per share. Earlier this week, Jefferies analysts Andy Barish and Alexander Slagle pegged Starbucks as its top pick in the consumer sector, citing ongoing momentum in its China business and better visibility on U.S. growth drivers. 

Last month, JPMorgan analyst John Ivankoe lifted his rating on the group to 'overweight", with an a $4 improvement to his price target that now sits at $94 a share, following a meeting with senior management that included CEO Kevin Johnson. 

Starbucks shares were marked  1.7% higher in early trading Thursday to change hands at $90.42 each. 

Starbucks' shares have been stagnant of late, however, despite the bullish forecasts from analyst and the company itself. The stock has risen only only 1.9% over the past six months and one of its key rivals in China -- Luckin Coffee -- continues to overtake its store presence in the world's largest coffee market, outnumbering Starbucks by some 200 outlets (4,500 to 4,300) around the country.

Starbucks met Street forecasts for its fourth quarter earnings on October 30 and guided for fiscal 2020 revenue growth of between 6% and 8%, implying a top line of around $28.4 billion. It also sees earnings in the region of $3.00 to $3.05 per share, compared to a $2.83 tally for 2019.

"We expect that fiscal 2020 will be another good year for Starbucks, delivering 8% to 10% operating profit growth," CFO Pat Grismer said at the time. "We are fully committed to our long-term model of double-digit non-GAAP EPS growth and will continue to make the investments necessary to sustain this growth over the long term."

The group is scheduled to publish first quarter earnings on January 28.