J.P. Morgan lowered its rating on shares of Starbucks (NASDAQ:SBUX) to neutral from overweight Monday, telling investors in a note that further "upside from here is limited" after the stock has climbed over 90% in the past 12 months.
"Price performance following F3Q19 results has exceeded our expectations," according to J.P. Morgan analyst John Ivankoe.
The firm’s move comes after the coffee shop giant’s stock climbed over 9% after its fiscal third-quarter earnings report beat Wall Street’s expectations on Thursday. The analyst pointed out that Starbucks stock pop was "its biggest one-day gain since November 2," Ivankoe said, and takes it "to levels well above even our $91 December 2020 price target."
Q3 Comparable Store sales were up 6% globally, Led by 7% comparable growth in the U.S. and 6% comparable growth in China. Global net store growth of 7% Versus Prior Year, Led by 16% net store growth in China
GAAP EPS proved $1.12, while Non-GAAP EPS of $0.78, Up 26% Year-Over-Year
What’s more, active Starbucks® Rewards Membership in the U.S. increased 14% Year-Over-Year to 17.2 Million
CEO Kevin Johnson said, “Our two targeted long-term growth markets, the U.S. and China, performed extremely well across a number of measures as a result of our focus on enhancing the customer experience, driving new beverage innovation and accelerating the expansion of our digital customer relationships."
J.P. Morgan stuck to its $91.00 price target on Starbucks shares. The firm also removed Starbucks from its “Analyst Focus List.”
Shares dropped $1.49, or 1.5%, to $97.62
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