WR Hambrecht Keeps Buy on Starbucks

The coffee chain posted softer-than-expected store sales, but analyst Kristine Koerber still sees a buying opportunity

WR Hambrecht keeps its buy rating on Starbucks (SBUX ).

Analyst Kristine Koerber says August comparable sales were in-line with her 8% to 10% estimate, above management's guidance of 3% to 7%. She says August comparable sales have moderated a bit from double-digits over the past nine mos, but she believes high, single-digit comparable sales, on top of a high, single-digit year ago increase, is impressive.

Koerber thinks Starbucks shares could come under pressure as some investors may be disappointed with August comparable sales. She views any weakness as a buying opportunity. Koerber expects Starbuck's shares to appreciate on a p-e basis at least in-line with earnings growth. She sees 95 cents fiscal 2004 (Sep.) earnings per share and $1.17 fiscal 2005 earnings per share.

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