Starbucks’s downgrade

Today, UBS downgraded Starbucks (SBUX) from “buy” to “neutral,” but raised its 12-month price target to $78 from $72. The new price target implies a rise of 4.0% from its stock price of $75.03 on April 5.

Although Starbucks’s SSSG momentum and the streamlining of its operations are positives that position the company in a better state going forward, UBS thinks the downside risk is more elevated, according to CNBC. The company’s stock price has increased by 55% from the lows of June 2018. UBS considers the increase in Starbucks’s stock price to reflect investors’ expectations, which are now elevated.

UBS Downgrades Starbucks to ‘Neutral’ from ‘Buy’


Other analysts’ ratings

Among the total 29 analysts that cover Starbucks, 41.4% are favoring a “buy” rating, while 55.2% are recommending a “hold,” and 3.4% are recommending a “sell” recommendation. Analysts have given Starbucks a 12-month price target of $70.07, which implies a fall of 6.6% from its stock price of $75.03. Earlier, on March 27, Wedbush had raised its price target for Starbucks from $66 to $70.

Peer comparisons

Of the total 25 analysts that follow Dunkin’ Brands (DNKN), 20.0% have given it “buys,” while 76.0% are favoring “holds,” and 4.0% are favoring a “sell.” On average, analysts’ 12-month price target for DNKN stands at $71.67, which implies a fall of 4.7% from its stock price of $75.17.

Among the 29 analysts that follow McDonald’s (MCD), 79.3% have given it “buys,” while 20.7% have given it “holds.” Analysts have given McDonald’s a 12-month price target of $199.24, which implies a potential upside of 4.5% from its current price of $190.71.

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