Starbucks Back To Business In Japan Today

Starbucks Coffee Japan (SBUX) is reopening many of its stores in Japan today, including in Tokyo, reports Reuters.

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However, many of SBUX’s 1,550 Japan stores will only offer take-out and drive-through services to protect the health and safety of customers and employees.

In 2015 Starbucks Coffee Japan became a wholly-owned subsidiary of Starbucks.

Earlier this month Starbucks revealed that it expects more than 90% of its US stores to reopen by early June, with modified operations and hours.

Analysts currently hold a cautiously optimistic outlook on SBUX shares with a Moderate Buy consensus. This is based on 10 recent buy ratings vs 11 hold ratings. Meanwhile the $80 average analyst price target only indicates upside potential of 5%, despite a 13% drop year-to-date. (See Starbucks stock analysis on TipRanks).

“While near-term sentiment likely remains solid as store base reopens, we look for a pullback into the $60s to become more aggressive on our Outperform rating” writes Oppenheimer analyst Brian Bittner.

He has a buy rating on the stock with an $85 price target (12% upside potential).

According to Bittner, the Street’s forecast for full restoration in unit economics by 2021 appears aggressive- and he remains below the Street through next fiscal year on revenue, margins and EPS.

“In the near term, investor sentiment likely tracks SBUX’s plans to re-open units, US states easing lockdowns and the overall receding of the virus. Our work suggests a more difficult setup against Street expectations when investors’ focus turns towards the economics of the recovery” the analyst concludes.