Friday, June 8, 2007

Starbucks

via briefing.com

Starbucks target cut to $32 at Deutsche (27.44 ) -Update : Deutsche cuts their tgt on SBUX to $32 from $37 as firm notes their proprietary research on favorable consumer response to its premium coffee, coupled with McDonald's (MCD) emphasis on this high-margin segment suggests the biggest competitive threat to SBUX comes from the biggest global competitor. The downside of MCD's getting coffee right is material to both same-store sales and the global growth opportunity.

Wachovia : Wachovia thinks that customer menu preference data and recent trends suggest that both MCD and BKC with their premium coffee offerings may be taking market share from other retail outlets, including foodservice establishments and convenience stores. In addition, when firm looks at the timing of the QSR premium coffee rollouts, they see a negative impact on menu preference at SBUX and Dunkin Donuts. While other factors certainly could be at play, firm thinks the timing is worth noting and that it could suggest that the QSR hamburger chains have taken some share from these players, particularly Dunkin Donuts

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I just don't see MCD and BK posing a threat to SBUX. Starbucks is about the experience (or so I heard as I don't drink coffee) for these yuppie 20 and thirty somethings.

Going to start a position in SBUX today.

6 comments:

Bullish Jim said...

I was looking at SBUX just yesterday wondering when it would bottom out. That is one God awful chart since November but an interesting contrarian choice. I'm inclined to think that it will bounce soon but I'm not sure it's happening yet. Good luck with it.

I agree with your comment about SBUX drinkers not switching to McD coffee. I work with a ton of people who drive out of their way and wait in line to pay twice as much for SBUX coffee. Most of them would rather be caught dead than with a McD coffee cup in their hands. That's not changing any time soon.

ShortDaBull said...

yeah it probably will have more downside especially if the market weakens. But I think it's at a decent fundamental buy point here and too much negativty in the stock. It ain't AMGN. lol.

Bullish Jim said...

Hey, AMGN is up 5% for me!

That was a very similar buy to SBUX here, by the way. I just waited for a few days of sideways movement before I pulled the trigger. I might well join you in SBUX within a few days if it strengthens even a little bit.

ShortDaBull said...

haha what I meant regarding AMGN is that it was bombarded with bad news every time I thought it was done.

Speaking of bottom fishing, what are your thoughts on NKTR? 30% float short, possible M&A candidate in my opinion, company trying to cut costs,

Things I don't like: too many positive analysts, and the chart tells me it will go to around 9 before stabilizing.

Bullish Jim said...

I have no take at all on NKTR from a fundamental perspective. From a technical perspective that chart scares the crap out of me. Once support at $11 gave way I think it's anybody's guess where it bounces. I'd probably wait for a BOB or some other compelling bottom reversal before touching it. That said I wouldn't be surprised if you get at least a bit of a bounce around $10.

Bullish Jim said...

I looked more closely at the NKTR chart and posted a blurb on my blog about it. In short, I may be a buyer at $10. Just for fun...