Starbucks

(SBUX) - Get Report

stock is quite sensitive to the number of daily customers per Starbucks store, which is impacted by the competition that Starbucks faces from players like

McDonald's

(MCD) - Get Report

,

Caribou Coffee

(CBOU)

and

Peet's Coffee & Tea

(PEET)

.

We currently have a Trefis price estimate of $24 for Starbucks's stock, about 4% above the current market price of $23. Below is the chart showing estimates that suggest there could be downside to Starbucks's stock based on falling customer traffic.

In the past, number of daily customers per store has decreased from 463 in 2005 to 424 in 2009. Food chains with lower-priced beverages cut into Starbucks' customer segment. This was amplified further by lower spending by consumers during recession.

We believe that Starbucks will continue to differentiate itself from premium coffees offered by McDonald's and other chains which will be an important factor leading to the reversal in the declining trend.

The average of forecasts for number of daily customers per store created by Trefis members indicated a projected increase from 428 in 2010 to 509 by the end of the Trefis forecast period, compared to the baseline Trefis estimate of an increase from 434 in 2010 to 531 by the end of the Trefis forecast period. The member estimates imply a downside of 3% to the Trefis price estimate for Starbucks's stock.

Our

complete analysis for Starbucks's stock is here.

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Trefis Members constitute more than tens of thousands of users of the Trefis platform, inclusive of investors, financial analysts, and business professionals who use the Trefis platform to create their own models and price estimates.

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