Shares of Starbucks (NASDAQ:SBUX) are falling as the company prepares to report earnings after the market closes Tuesday, the company faces a critical test regarding its long-term strategy in China, following a recent surge in shares tied to advancements in a joint venture.
- Starbucks stock is trading at elevated levels. Where are SBUX shares going?
Starbucks (SBUX) Earnings Preview: Estimates And Key Themes
The upcoming earnings call will serve as a litmus test for Starbucks’s ability to capitalize on its strategic initiatives.
- EPS Estimate: $0.44 (Up from $0.41 YoY) – EPS expectations of $0.44 represent a positive shift in profitability that could bolster investor confidence in the company’s growth trajectory.
- Revenue Estimate: $9.23 billion (Down from $8.76 billion YoY) – Revenue of $9.23 billion would validate Starbucks’s ongoing efforts in China, but a decline from the previous year raises concerns about market saturation and competition.
In January, Starbucks delivered EPS of $0.56, missing the $0.58 estimate, with revenue of $9.92 billion, which was above expectations. Given the pattern of misses, investors should watch for any signs of improvement in both earnings and revenue, especially as the company attempts to regain momentum in a competitive landscape.
Starbucks (SBUX) Analyst Ratings And Price Targets
The stock carries a Buy Rating with an average price target of $103.12. Notable recent moves include:
- JP Morgan: Overweight (Raised Target from $95.00 to $100.00) (April 24)
- DA Davidson: Neutral (Lowered Target from $97.00 to $97.00) (April 22)
- Stifel: Buy (Raised Target from $105.00 to $115.00) (April 21)
- Tigress Financial: Buy (Lowered Target from $136.00 to $122.00) (April 15)
- Citigroup: Neutral (Raised Target from $92.00 to $99.00) (April 14)
- Jefferies: Upgraded to Hold (Raised Target from $86.00 to $92.00) (April 13)
- RBC Capital: Upgraded to Sector Perform (Target $105.00) (March 18)
Full analyst coverage indicates a wide divergence in price targets from 35 analysts, reflecting the market’s split view on Starbucks’s valuation. Valuation Insight: *The high P/E ratio suggests that investors are optimistic about future growth, but any disappointment in earnings could lead to significant volatility.*
Starbucks (SBUX) Key Metrics: Same-Store Sales And Digital Engagement
Investors should keep an eye on same-store sales growth, which has been a critical indicator of consumer demand and brand strength. Additionally, watch for any shifts in customer engagement metrics, particularly in the context of Starbucks’s digital initiatives and loyalty program, which have been pivotal in driving repeat business. Finally, monitor inventory levels, as any significant changes could signal shifts in demand or supply chain challenges.
Starbucks (SBUX) Top ETF Exposure And Passive Flow Risk
- The Consumer Discretionary Select Sector SPDR Fund (NYSE:XLY): 2.23% Weight
- State Street Consumer Discretionary Select Sector SPDR ETF (NYSE:XLY): 2.57% Weight
- Fidelity MSCI Consumer Discretionary Index ETF (NYSE:FDIS): 1.66% Weight
Significance: Because SBUX carries significant weight in these funds, any significant inflows or outflows for these ETFs will likely force automatic buying or selling of the stock.
SBUX Stock Price Today: Shares Dip Ahead Of Earnings
SBUX Stock Price Activity: Starbucks shares were down 0.86% at $97.05 at the time of publication on Tuesday, according to Benzinga Pro data.
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