Starbucks (SBUX) looking strong before the earnings

1:28 pm ET, 31 Oct 2018

Starbucks Corporation (SBUX) shares are trading at $58.02, roughly flat compared to yesterday. The company is announcing its quarterly earnings results on Thursday after the market close. What's driving SBUX stock price? What's SBUX stock price forecast?

Starbucks Corporation operates as a roaster, marketer, and retailer of specialty coffee worldwide. Lately, the stock has performed well: it generated a return of 13% in the past three months. Starbucks Rewards program membership increased by 14% to 15.1 million in the last quarter and it represents around 40% of U.S. company-operated sales.

Investors are showing interest in the company as they expect strong revenue growth in the next few years. On the other hand, few bearish investors feel that the sluggish China market might hit the top line. Last quarter’s revenue rose 12% to $6.31 billion and earnings per share came at 62 cents a share compared to 55 cents a share for the same period last year. Comparable same-store sales increased 1%.

Fourth-quarter results will be released after market close on November 01, 2018. Analysts expect the company to earn 60 cents a share on revenue of $6.27 billion. The company beat analysts’ estimates in the previous two quarters.

What is the sentiment towards the SBUX stock? Our technical analysis shows that:

  • The stock short-term sentiment (next 30 days) is trending positive;
  • The mid-term sentiment (3-6 months) is positive;
  • The long-term sentiment (9-12 months) is trending positive. 

Over the last month, Starbucks Corporation (SBUX) returned +1.4%.

Starbucks Corporation (SBUX) average analyst price target ($58.25) is 0.31% above its current price ($58.07).

For the latest price and information on Starbucks Corporation, please visit Finstead and search for "SBUX price" or "SBUX news".

Starbucks Corporation (SBUX) Stock Guide

Updated at: 1:38 pm ET, 18 Sep 2020

Before we start: if you're looking for SBUX stock price, you can quickly find it out by visiting Finny and typing "SBUX quote". If you're looking for a quick scoop on SBUX stock (chart, price target, market cap, news and buy or sell analysis), go to Finny and look for "SBUX". You'll get all this info in one place. Or you can just type "SBUX news" to get the latest stock news.

Looking to buy or sell Starbucks Corporation (SBUX)? Interested in getting the full scoop on SBUX, including earnings and dividends, stock forecast, buy or sell analysis and key stats? If so, you came to the right place.

In this SBUX stock guide, we'll address key questions about SBUX, above and beyond what you can find on Yahoo Finance, Zacks, MarketWatch or Morningstar.

Here is what you'll be able to find in this guide:

Earnings and Dividends: earnings, earnings date, dividend rate and dividend yield;
Analyst Predictions: stock forecast and analyst ratings;
Analysis: Finny Score and buy or sell analysis;
Key Stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio, industry, sector, and number of employees.

And here is the list of questions we'll answer:
1. What are SBUX earnings?
2. What is SBUX dividend?
3. What is SBUX dividend yield?
4. What is SBUX stock forecast (i.e., prediction)?
5. SBUX buy or sell? What is SBUX Finny Score?
6. What are the reasons to buy SBUX? Why should I buy SBUX stock?
7. What are the reasons to sell SBUX? Why should I sell SBUX stock?
8. What are SBUX key stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

So let's start. Scroll down to the question that interests you the most.

Earnings and Dividends

1. What are SBUX earnings?

SBUX trailing 12-month earnings per share (EPS) is $1.13.

2. What is SBUX dividend?

SBUX forward dividend is $1.64.

3. What is SBUX dividend yield?

SBUX forward dividend yield is 1.94%.

Analyst Predictions

4. What is SBUX stock forecast (i.e., prediction)?

Based on SBUX analyst price targets, SBUX stock forecast is $82.77 (for a year from now). That means the average analyst price target for SBUX stock is $82.77. The prediction is based on 33 analyst estimates.

The low price target for SBUX is $64.00, while the high price target is $95.00.

SBUX analyst rating is Buy.

Analysis

5. SBUX buy or sell? What is SBUX Finny Score?

#{finnyScore:44}Our quantitative analysis shows 4 reasons to buy and 5 reasons to sell SBUX, resulting in Finny Score of 44.

6. What are the reasons to buy SBUX? Why should I buy SBUX stock?

Here are the reasons to buy SBUX stock:

  • We expect Starbucks to adapt to evolving consumer behaviors thanks to a brand that transcends channels; digital, social media, and loyalty program investments (including Mobile Order & Pay); and an unrivaled in-store experience.
  • A revitalized food/beverage menu and upscale store redesigns have elevated the Starbucks customer experience, penetrated new dayparts, and boosted unit-level productivity metrics.
  • Despite ambitious growth plans, we believe Starbucks can sustain a 45%-50% dividend payout ratio over the next decade, implying midteens average annual dividend growth.
  • Starbucks is one of the most recognized coffee brands in the world. From espresso to specialty roast and ground coffee to premium single-serve market, Starbucks commands authority and a leading position in all coffee segments. It is the number one premium packaged coffee brand in America.
  • Starbucks holds a leading position in digital, card, loyalty and mobile capabilities. Retail companies are witnessing a shift in consumer shopping behavior from bricks-and-mortar stores to online shopping. Customers are consuming more food/ beverages away from home and using mobile phones for most online activity.
  • Starbucks is strengthening its product portfolio with significant innovation around beverages, refreshment, health and wellness, tea and core food offerings.
  • Moreover, the Starbucks brand is gaining popularity with consumers across Asia as the company is increasingly investing in the Asian markets. The relatively low per-capita consumption as well as a burgeoning middle class with rising income levels increase the demand for convenience food and beverages and promise significant growth potential.
  • SBUX profitability is improving. The YoY profit margin change was 5.39 percentage points. See SBUX profitability chart.
  • SBUX forward dividend yield is 1.94%, higher than the industry (0.54%) and sector (0.55%) forward dividend yields. See SBUX forward dividend chart.
  • SBUX average analyst rating is Buy. See SBUX analyst rating chart.
  • SBUX cash to debt ratio is 0.16, higher than the average industry (0.12) and sector (0.13) cash to debt ratio. See SBUX cash to debt chart.

7. What are the reasons to sell SBUX? Why should I sell SBUX stock?

Let's look at the reasons to sell SBUX stock (i.e., the bear case):

  • With minimal switching costs, there is little to prevent consumers from trading to other chains such as Dunkin' Brands, Tim Hortons, or McDonald's. Joh. A. Benckiser's consolidation of Panera, Mondelez's coffee assets, D.E Master Blenders, Peet's, Caribou, Einstein Noah, and Keurig could evolve into a more significant rival.
  • Teavana, Princi, and Evolution Fresh may not evolve into successful stand-alone brands or retail concepts and could divert management's attention from the core Starbucks brand.
  • Commodity cost and foreign currency volatility can disrupt quarter-to-quarter results.
  • The company’s Americas segment (accounting for 70% of the total revenues) posted 3% comps growth in fiscal 2017, down considerably from 6% in the year-ago period. In fact, transactions remained unchanged year over year and ticket grew 4%. This compares unfavorably with 5% growth in transaction and an increase of 1% in ticket in the year-ago period.
  • Despite economic growth, somewhat lower energy prices and higher income, consumers increased their spending only modestly on dining out, which resulted in low consumption over the past few quarters. This is because, along with wage growth, inflation is also on the rise, which translates to lower real income and thus less disposable income. The situation has taken a worse turn, thanks to higher health care costs and tightened credit availability in the United States.
  • SBUX stock price ($85.27) is close to the 52-week high ($89.22). Perhaps now is a good time to sell? See SBUX price chart.
  • SBUX quarterly revenue growth was -38.10%, lower than the industry and sector average revenue growth (1.25% and 0.78%, respectively). See SBUX revenue growth chart.
  • SBUX forward P/E ratio is 32.11, which is high compared to its industry peers’ P/E ratios. See SBUX forward P/E ratio chart.
  • SBUX PEG ratio (P/E adjusted for growth) is 32.40, which is high compared to its industry peers’ PEG ratios. See SBUX PEG chart.
  • SBUX average analyst price target ($82.77) is below its current price ($85.27). See SBUX price target chart.

Key Stats

8. What are SBUX key stats : revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

Let's look at the key statistics for SBUX:

Metrics SBUX
Price $84.27
Average Price Target / Upside $82.77 / -1.78%
Average Analyst Rating Buy
Forward Dividend Yield 1.94%
Industry Restaurants
Sector Consumer Cyclical
Number of Employees 291,000
Market Cap $100.59B
Forward P/E Ratio 32.11
Price/Book Ratio 4.18
Revenue (TTM) $24.06B
YoY Quarterly Revenue Growth -38.10%
Profit Margin 5.56%

If you liked this analysis, check out Stock Guides for other stocks.

Follow Us