Starbucks Corporation SBUX is off to a brutal start to 2022, but Bank of America analyst Sara Senatore said Monday that there's reason for optimism after taking a close look at Starbucks' quarterly demand trends.

The Numbers: Senatore said Starbucks Rewards membership growth is a leading indicator of demand for the coffee retailer. Fourth-quarter membership was up 28%.

Based on historical trends, Senatore estimated Starbucks' first-quarter Americas same-store sales growth at about 21%, slightly above the reported number of 18% growth. She said the actual number would likely have been in-line with her 21% growth estimate if not for the negative impact of the omicron COVID-19 variant.

Related Link: Domino's, Yum! Brands Among Biggest COVID-19 Pandemic Restaurant Stock Winners

Looking ahead, Senatore said Starbucks Rewards membership growth slowed to just 21% in the first quarter, implying roughly 12% year-over-year Americas same-store sales growth in the quarter.

She also said there is a strong historical correlation between Starbucks monthly active users and total dollars loaded, which are spent in subsequent quarters. MAU growth slowed from 13% in the fiscal second quarter to 10% in the fiscal first quarter, but remained steady at about 12% on a three-year basis.

How To Play It: In China, Senatore said lockdowns continue to weigh on Starbucks' numbers. Senatore projects a fiscal second-quarter China same-store sales decline of 10% year-over-year.

She said China weakness and potential labor cost increases in the U.S. have weighed on the stock in 2022.

"That said, the current valuation is at an historical low on a relative basis (1.0x relative P/E vs 5-yr average of 1.5x) suggesting these headwinds are approaching being fully discounted," Senatore said.

Bank of America has a Buy rating and $110 price target for Starbucks.

Benzinga's Take: Starbucks' Americas business seems perfectly healthy, so it's reasonable to assume that a potential 2022 rebound in Starbucks shares will rely heavily on a recovery in China. After the recent sell-off, Starbucks shares are attractively valued on a historical basis, trading at a forward earnings multiple of just 20.5.