Starbucks (NASDAQ:SBUX) is being downgraded from a BUY rating down to a NEUTRAL rating at Goldman Sachs this morning.  Starbucks has now underperformed its peers since being a buy at Goldman in 2005 and the S&P after a 37.6% drop over the last year on same store sales growth leading to underperformance.  Goldman Sachs also notes declining new store productivity, margin erosion, and concerns over U.S. competition and market saturation.

Goldman Sachs says it continues to view Starbucks favorably but sees few near-term catalysts to reinvigorate sentiment in the coffee king.  Goldman Sachs is lowering its $27.00 target down to $26.00.

After you read this note and see the Goldman Sachs stamp on it, you might wonder where the analyst was hanging out over the last 5 or 6 months.

Jon C. Ogg
December 11, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.