Apple shares collapsed earlier this month after warning that iPhone sales would fall short because of weakness in the China economy.

Starbucks will be next, according to Goldman Sachs.

The firm downgraded the world’s largest coffee seller to neutral from buy on Friday, citing “a number of points of caution on China.”

“The recent AAPL (Apple) announcement (while potentially also product-driven) cited trade concerns/macro, and MCD (McDonald’s) acknowledged softer trends in the region at a late November event,” wrote analyst Karen Holthouse in a note to clients. “The GS macro team also expects a continued slow down in GDP, at least partially driven by consumption.”

Goldman also lowered its price target on Starbucks to $68 from $75. The shares fell more than 2 percent in premarket trading Friday to $62.51 following the Goldman call.

Starbucks has 3,600 stores in China and wants to double that number in the next four years. Goldman noted the stock has doubled the return of the S&P 500 since the firm added Starbucks to its buy list in late 2014 so now is a good time to take some profits.

Goldman also downgraded shares of Yum Brands to sell on Friday, citing valuation and concerns about U.S. sales momentum at Pizza Hut and Taco Bell.

The firm lowered its price target on Yum to $76 from $83. The stock fell 2 percent in premarket trading Friday to $89.75.

With reporting by Michael Bloom

WATCH: How Starbucks went from one coffee bean store to an $80 billion business

Products You May Like

Articles You May Like

There’s a business growing within Amazon that could one day be worth more than retail or cloud
USC blocks students embroiled in admissions scandal from registering for classes
Fed holds rates steady; here’s what that means for your wallet
Need help paying for college? It’s not too late to file a FAFSA
Deutsche Bank and Commerzbank go public on merger talks

Leave a Reply

Your email address will not be published. Required fields are marked *