On September 19, 2023, TD Cowen analyst Andrew M. Charles made a significant announcement regarding Starbucks Corp (NASDAQ:SBUX). Charles downgraded the company’s shares from Outperform to Market Perform and also lowered the price target from $117 to $107. The main reason behind this decision was the intense competition faced by Starbucks in China, particularly from low-priced competitors who are rapidly gaining market share. These competitors are offering aggressive discounts that are expected to continue for at least the next two years. Additionally, there are macroeconomic headwinds in China that are negatively impacting consumer spending.
As a result of these factors, the analyst adjusted the projected China comparable sales for 2024-25E to 14% and 5%, down from the previous estimates of 26% and 9.5%. Despite these challenges, Charles still sees potential in Starbucks’ non-China International space, which is considered a bright spot in the company’s portfolio.
In terms of North America, the analyst’s models indicate comparable sales of 7%, 6%, and 6% for the fourth quarter of 2023, 2024, and 2025, respectively. These figures are in line with the Consensus Metrix (CM) estimates of 6.4%, 5.7%, and 5.8%.
Furthermore, the analyst revised the earnings per share (EPS) estimates for 2023-25E to $4.10, $4.78, and $5.58, down from the previous projections of $4.20, $4.96, and $5.90. These revised figures are also slightly lower than the consensus estimates of $4.10, $4.81, and $5.59.
Overall, TD Cowen analyst Andrew M. Charles’s downgrade and adjustments reflect the current challenges faced by Starbucks in the Chinese market, but also highlight potential opportunities in other regions.
Starbucks Corporation
SBUX
Neutral
Updated on: 19/09/2023
Financial Health
Weak
Debt to equity ratio: Strong Sell
Price to earnings ratio: Strong Buy
Price to book ratio: Strong Sell
DCF: Strong Buy
ROE: Neutral
Starbucks Corporation Stock Performance Declines on September 19, 2023, but Positive Growth in Earnings and Revenue Indicates Promising Future
On September 19, 2023, Starbucks Corporation (SBUX) experienced a decline in its stock performance. The previous day’s closing price was $96.76, and the stock opened at $95.24. Throughout the day, the stock’s price fluctuated within a range of $94.28 to $95.44. The trading volume for the day was 317,063 shares, which is significantly lower than the average volume of 6,247,655 shares over the past three months.
Despite the decline in stock price on this particular day, Starbucks has shown positive growth in its earnings. The earnings growth rate for the previous year was -20.21%, indicating a decline in profits. However, the company has rebounded, with a positive earnings growth rate of +15.64% for this year. Looking ahead, Starbucks is projected to experience significant growth in the next five years, with an estimated earnings growth rate of +18.21%.
In terms of revenue, Starbucks has demonstrated a positive growth rate of +10.91% in the past year. This indicates that the company has been successful in increasing its sales. The price-to-earnings (P/E) ratio for SBUX stock is 29.1, suggesting that investors are willing to pay a premium for the company’s earnings.
When comparing Starbucks to other companies in the restaurant industry, it is important to note that SBUX stock performed better than some of its competitors on September 19, 2023. Chipotle (CMG) experienced a decline of -0.71%, Yum! Brands (YUM) declined by -0.62%, Yum China Holdings (YUMC) declined by -0.93%, and Restaurant Brands International (QSR) declined by -1.08%.
Starbucks is scheduled to release its next earnings report on November 3, 2023. Analysts are forecasting an earnings per share (EPS) of $0.99 for the current quarter. In the previous year, Starbucks generated an annual revenue of $32.2 billion and a profit of $3.3 billion, resulting in a net profit margin of 10.18%.
Starbucks operates in the consumer services sector, specifically in the restaurant industry. The company is headquartered in Seattle, Washington. Although no executives were mentioned in the provided information, it is important to note that the performance of a company is influenced by its leadership and management.
In conclusion, while Starbucks experienced a decline in its stock performance on September 19, 2023, the company has shown positive growth in its earnings and revenue. With a projected earnings growth rate of +18.21% for the next five years and a positive revenue growth rate of +10.91% in the past year, Starbucks appears to be on a positive trajectory. Investors should monitor the company’s upcoming earnings report on November 3, 2023, to gain further insights into its financial performance.
Starbucks Corp (SBUX) Stock Forecast: Potential 15.44% Growth Expected in Coming Months
On September 19, 2023, Starbucks Corp (SBUX) stock showed promising performances based on the information provided. According to CNN Money, 26 analysts offering 12-month price forecasts for SBUX have a median target of $110.00, with a high estimate of $150.00 and a low estimate of $101.00. This indicates a potential increase of 15.44% from the last recorded price of $95.29.
The consensus among 30 polled investment analysts is to hold stock in Starbucks Corp. This rating has remained steady since September, when it was unchanged from a hold rating. This suggests that the overall sentiment towards SBUX is positive, with analysts recommending investors to maintain their current holdings.
In terms of financial performance, Starbucks Corp reported earnings per share of $0.99 for the current quarter. This indicates a strong profitability for the company. Additionally, the company reported sales of $9.4 billion, highlighting its ability to generate substantial revenue.
Investors can anticipate the next earnings report from Starbucks Corp on November 3, which will provide further insights into the company’s financial health and performance.
Overall, based on the forecasts and consensus rating, Starbucks Corp’s stock shows potential for growth in the coming months. With a median target of $110.00, analysts expect the stock to increase by 15.44%. However, it is important for investors to conduct their own research and consider their risk tolerance before making any investment decisions.
Discussion about this post