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Pro Analysis

Buy Starbucks shares on dips, JPMorgan says; company to thrive long term during Trump presidency

An employee pours water from a pot into a coffee filter at a Starbucks Corp. coffee shop in Phnom Penh, Cambodia on Monday, Oct. 24, 2016.
Taylor Weidman | Bloomberg | Getty Images
An employee pours water from a pot into a coffee filter at a Starbucks Corp. coffee shop in Phnom Penh, Cambodia on Monday, Oct. 24, 2016.

JPMorgan told investors to buy Starbucks shares on any pullbacks due to the company's long-term earnings growth potential. The analyst also said the coffee chain, which offers wages and benefits higher than the industry average, would attract strong employees if a Donald Trump–led economy causes some people to lose their health care.

Starbucks "remains a core holding even if 15-20% 5-year EPS target looks aggressive...ideally add to shares lower," wrote analyst John Ivankoe, who reiterated his overweight rating after a meeting with management.

"Our conclusion is that Starbucks remains an exceptional company with leading long-term growth prospects but we take a more conservative approach to long-term earnings growth."