Starbuck's Scalded by Downgrade
Shares of Starbucks (SBUX) tumbled Monday after UBS said the coffee chain operator's stock run-up might be over.We think this a tremendous buying opportunity; our target on Starbucks is $45 given the fact that we think Starbuck's has 1 or 2 more dynamite quarters coming its way.
Starbucks is taking China by storm and inking some huge entertainment deals as it tries to carve out its musical offerrings.
UBS made a big mistake; we're as bullish on Starbucks today as we were a couple of weeks ago, when we spit out the following note:
...it's how well you build an enhanced experience around your core competencies -- and it helps if you treat your employees right. On that front, coffee king Starbuck's ripped the cover off the ball Thursday morning by boosting profits and raising forecasts. Look for Starbuck's earnings to accelerate in 2006 as the company expands abroad and leverages its brand equity.Starbuck's plans to open at least 1,800 new stores globally this year, including about 700 U.S. company-operated locations.
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