David Tarantino of Baird reiterated a Buy rating on shares of Starbucks Corporation
Speaking as a guest during CNBC's
According to Tarantino, Starbucks has many of the same attributes of a typical consumer staples name. From a qualitative perspective, consumers tend to purchase items at Starbucks on a daily or "ritualistic" basis. He added that from a financial metrics perspective, Starbucks also looks more like a consumer staples company than a traditional retailer.
Accordingly, Starbucks' valuation premium compared to consumer staples names is actually at a five-year low, even though its outlook "remain very strong."
The analyst did acknowledge that it may be "a bit of a stretch" to label a company that sells $5 coffee beverages as a "staple," but its mid-20 percent EBITDA margins "makes it act more like a staples company when you look at the sensitivity to the top-line and margin structure."
Shares of Starbucks were trading higher by 0.16 percent heading into the final hour of trading on Monday.
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