Starbucks - China re-opening
Starbucks Corp (SBUX) is set for better days ahead after China has largely abandoned its zero-Covid policy.
Bank of American Securities analysts raised Starbucks' price target, citing that the company will benefit from reopening the Chinese economy. As China emerges from nearly three years of pandemic lockdowns, the coffee chains see a rebound opportunity and could run up against an array of complications.
Analysts emphasized Starbucks' three specific factors – brand, scale and technology. Analysts expected Starbucks' investments in digital ordering during the pandemic to help.
Starbucks China plans to invest US$220 million in launching its Digital Technology Innovation centre. The company expected to facilitate further its digitization of store operations and in-house technology and data infrastructure. Analysts expect that Starbucks will take more orders as population mobility increases.
Analysts believe that mobile orders typically will benefit the company sales as more Chinese consumers adopt the morning coffee routine, Starbucks can be seen as an "accessible luxury" in China.
Howard Schultz, said Starbucks plans to reach 9,000 stores in China by 2025. They are confident to continue to invest and expand their business in China even though there is still uncertainty as the economy struggles with the fallout of policies, weak economic growth and widespread Covid outbreaks.
Our
Rakuten Trade Ideas 🎯 has recommended Starbucks during this period. The latest recommendation share price on that day was US$76.39 (current price US$100.83 which means +32% gains! by following our calls).
The share price of Starbucks is down -11.74% year-to-date (1 year), and the last price was US$100.83.
Bloomberg consensus rating has 14 Buys, 20 Holds, and 1 Sell with a 12-month target price of US$98.96
Sources:
Investing.com, Market Watch, China Daily, Business Wire
As at 9pm, Dow Jones Futures 33,363 (+0.26%).
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