- Piper Jaffray cut it's price target for Starbucks to $53 from $60.
- The firm is worried US sales growth could be stalling, and says the stock will remain range bound until trends improve.
- Shares of Starbucks fell about 1.8% in trading Wednesday following the downgrade.
- Follow Starbucks' stock price in real-time here.
Starbucks slid 1.8% in trading Wednesday after Piper Jaffray cut its recommendation to "neutral" from "overweight," citing a slowdown in US same-store sales.
"We believe the stock is range bound at best until U.S. trends improve," analyst Nicole Miller Regan wrote in a note sent out to clients on Wednesday, per CNBC. "Our perspective is that there are issues around inconsistent results, credibility of guidance, and management transitions."
Piper’s new price target is $53 a share — down from $60 in June, and $70 for the better part of 2017. Wall Street’s average target if $58, according to Bloomberg data.
In its most recent earnings report in July, Starbucks said same-store sales around the world rose just 1%. China — where the chain has been growing the quickest — saw sales slip to 2%.
"I want to be clear that we have 100 percent confidence in our growth strategy and the sustainability of the leadership position we have built in the market," CEO Kevin Johnson told analysts on a conference call following the report.
Still, Wall Street remains concerned.
“To sustain improvement in comps, Starbucks must execute on its key digital initiatives to expand relationships and drive transaction growth,” Fitch, one of the largest financial rating agencies, said earlier this month.
Starbucks on Wednesday confirmed Business Insider's previous reporting that the Pumpkin Spice Latte, a fall favorite, will return on August 28 this year — its earliest launch ever — perhaps in a bid to increase check size and bring the same-store sales number back to where Wall Street would like.
Starbucks shares are down 7.8% this year.
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