Starbucks inititated at Nomura with buy rating on tech initiatives, potential market share gain

Starbucks Corp. was initiated at Nomura with a buy rating on analyst belief that the coffee company's digital initiatives will maintain "robust" same-store sales in the Americas. The bank set a price target of $70. Shares are priced at about $57 in Friday trading. Nomura is particularly optimistic about the company's Mobile Order & Pay system. "Going forward, we believe that the high customer frequency that Starbucks enjoys-it remains, to the best of our knowledge, of all large North American retailers the one with the highest customer frequency, thanks in part to the low average check and the desire by many folks to purchase coffee and/or coffee-based beverages once or more daily-will help it enhance its brand experience in ways that most other quick-service brands will find it much more challenging to do," analysts wrote in a note. Analysts also "view Starbucks as the best-positioned beverage specialist in the restaurant industry," driving potential market share gains. The outlook for coffee costs are also favorable, analysts said. Starbucks shares are up 22% for the past year while the S&P 500 is down 9% for the same period.

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