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BofA Securities analysts raised their price target on Starbucks Corporation (NASDAQ:SBUX) to $125 from $109 and reiterated a “Buy” rating on the shares, citing tailwinds from the reopening of the Chinese economy.
In their latest note on the iconic coffee chain, the analysts see SBUX as ‘poised to benefit from China’s long awaited economic reopening’ now that ‘China has largely abandoned its zero-COVID policy.’
While ‘the timing of this tailwind is still uncertain’ due to economic struggles and widespread COVID-19 outbreaks, it is nonetheless modeled ‘China will recover to ~60-70% of normalized levels in 2023’, giving a boost to the company’s bottom line.
BofA Securities further notes that the struggles of the past few years, such as ‘SBUX’s transitory China challenges and U.S. margin pressure’ have created a ‘particularly attractive buying opportunity.’
Consequently, the analysts raise the price target to $125 from $109 and reiterate a ‘Buy’ recommendation.
Shares of SBUX are gaining 1% in pre-market on the first trading day of 2023, having lost nearly 15% in 2022.
