Starbucks (SBUX.US) stock rose 1.5% during today's session after BofA Securities and Deutsche Bank analysts labeled the world's biggest coffee chain with a pair of buy ratings.
BofA resumed its coverage of the stock with a $135 target as "growth in the specialty coffee segment continues to outpace that of overall foodservice globally and in the US." Starbucks is one of the few that have been able to build scale and thus derived supra-competitive returns and the impact of smaller concepts, including those with high growth, will be limited in the near term, according to BofA. Despite the strong earnings in the US, headwinds in China - where Starbucks is rapidly opening new locations - are driving the current valuation in the stock. But China concerns appear overstated, as prior economic slowdowns in the country had less of an impact on Starbucks than its local competitors, BofA argued.
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Create account Try a demo Download mobile app Download mobile appDeutsche Bank upgraded the company's rating to buy from hold while keeping the price target at $127,citing the company's "incredible" momentum in the U.S., attractive valuation, as well as its prospects of continued unit growth in China.
Starbucks (SBUX.US) stock launched today's session sharply higher however buyers failed to break above resistance zone around $113.85 and price pulled back below earlier broken downward trendline and 23.6% Fibonacci retracement of the last downward wave. If current sentiment prevails, support at $110.45 may be at risk. Source: xStation5
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