The backlash from some consumers about Starbucks ' decision to eventually hire 10,000 refugees worldwide could negatively impact sales in the near term, according to analysts at Credit Suisse, who reiterated a hold rating on the coffee seller. "Our work shows a sudden drop in brand sentiment following announcement of the refugee hiring initiative on Jan. 29th, to flattish from a run-rate of ~+80 (on an index of -100 to +100). Net sentiment has since recovered, but has seen significant volatility in recent weeks," equity analyst Jason West wrote in a research note. Starbucks issued the statement in response to President Donald Trump's executive order barring immigrants from certain nations from entering the United States. "We have a long history of hiring young people looking for opportunities and a pathway to a new life around the world. This is why we are doubling down on this commitment by working with our equity market employees as well as joint venture and licensed market partners in a concerted effort to welcome and seek opportunities for those fleeing war, violence, persecution and discrimination," Howard Schultz, Starbucks' chairman and CEO, wrote back in January . Trump supporters threatened to boycott the coffee maker. Since the announcement was made, shares of Starbucks are flat. Starbucks vs S & P 500, 1 year Source: FactSet "We see potential for a scenario in which US SSS [same-store sales] slowed for a few weeks following news of the refugee hiring initiative, negatively impacting full-quarter SSS by ~70-80bps under a reasonable bear case," West said. Although Credit Suisse found little to no correlation between net sentiment data and U.S. same-store sales over the long term, analysts at the firm believe any sudden changes in sentiment could impact sales in the short term. "In our past work on Chipotle, we found that large and sudden spikes in net sentiment coincided with similar shifts in SSS trends," West wrote. The analyst notes that sentiment readings for Starbucks have been highly volatile in recent weeks, perhaps suggesting a "lingering" fallout from the refugee news. Apart from a potential backlash , the analyst says negative sales trends over the past four quarters could keep the stock at bay. "We also note that SBUX has missed US comps for four consecutive quarters and consensus calls for a meaningful acceleration through the rest of the year (against easing compares). It also doesn't help that overall restaurant sales have been weak in recent quarters, with several chains pointing to a slowdown in Feb, potentially related to the timing of tax refunds," West wrote. Over the next 12 months, Credit Suisse predicts shares of Starbucks could trade at $55 or about 2 percent lower from where the stock closed on Tuesday. — CNBC's Michael Bloom contributed to this story.
