Starbucks has 3,600 stores in China and wants to double that number in the next four years.
China will cut its GDP growth target for 2019 to 6 percent from 6.5 percent at a government meeting in March, policy sources told Reuters. The government is expected to take more monetary and fiscal measures to boost the economy this year amid weakening domestic demand and an ongoing trade battle with the U.S.
Trade talks between the two countries appear to be progressing well, but investors are striking a cautious tone until a formal agreement is announced by the March 2 deadline. It’s unclear what the effect of the trade battle has had directly on U.S. brands selling in the country, but many Wall Street analysts believe Apple is facing an “informal boycott” of its products by some Chinese consumers.
Goldman noted that Starbucks has doubled the return of the S&P 500 since the firm added the stock to its buy list in late 2014, so now is a good time to take some profits. Starbucks reports earnings on Jan. 24.