Goldman Sachs predicts: after Apple, Starbucks will be the next American giant to fall in China.

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Recently, Goldman Sachs, the king of Wall Street, pointed out that Starbucks is probably the next American giant to fall in China after Apple.

Apple's share price tumbled earlier this month after it warned it would revise down its forecast on weaker than expected iPhone sales due to slowing economic growth in China.

Goldman Sachs on Friday downgraded Starbucks stock to "neutral" from "buy" on the grounds that it "has some cautious views on China."

Analyst Karen Holthouse reported that "Apple has recently revised its financial forecast on the grounds of trade and macroeconomic concerns, McDonald's also acknowledged that the trend in the region turned weak in November last year, and Goldman Sachs macro team also expects China's GDP to slow, at least partly driven by consumption."

Goldman Sachs also lowered its target price for Starbucks to $68 from $75. Starbucks fell 2% to $62.97 on Friday after Goldman's announcement, before converging to $63.73 and closing only slightly lower.

Starbucks has 3600 stores in China and expects to double to 7200 in the next four years.

Sources revealed that Chinese officials will revise down this year's GDP growth target from 6.5% to 6% at their March meeting. As domestic demand weakens and the trade war with the United States continues, Chinese officials are expected to adopt more monetary and fiscal measures to support the economy.

Trade talks between the two countries appear to be progressing smoothly, but investors will remain cautious ahead of a March 2 deadline to announce a formal agreement. It's unclear what direct impact the trade war will have on big U.S. brands operating in China, but many Wall Street analysts believe Apple is suffering an "informal boycott" from some Chinese consumers.

Since Goldman Sachs put Starbucks on its "buy" list in late 2014, Starbucks has earned twice as much as the S&P 500, so now is a good time to take profits. Starbucks is expected to report earnings on the 24th of this month.

Yum Brands Group was downgraded

Goldman Sachs on Friday also rated Yum! Brands, Inc.) (Yum-US) downgraded to "sell" due to concerns about U.S. revenue momentum for Pizza Hut and Taco Bell.

Goldman Sachs lowered its target price on Yum to $76 from $83, and the stock fell about 1% to $90.94 Friday.

Source: Juheng. com

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