Starbucks is the world's largest coffee shop chain, which was founded in Seattle, Washington in the United States back in 1971. The company's shares (SBUX) are listed on the NASDAQ stock exchange in the US. The company yesterday shared a new outlook for profit and sales of its products.
Starbucks is the world's largest coffee shop chain, which was founded in Seattle, Washington in the United States back in 1971. The company's shares (SBUX) are listed on the NASDAQ stock exchange in the US. The company yesterday shared a new outlook for profit and sales of its products.
Starbucks' stock price has had quite a tumultuous period behind it. Even before the pandemic hit the financial markets, a single share cost more than $90, only to then fall below $60. The historic peak in Starbucks' stock price was reached in July 2022, where the SBUX share price rose above $120. Since then, the company's share price has fallen below $70 in April 2022. On Tuesday at the close of the session on Wall Street, Starbucks' share price was just under $87, at its highest level in nearly six months.
Source: Conotoxia MT5, Starbucks, W1
Starbucks shares with new prospects
Starbucks shares rose 2.7 percent in pre-session trading after the coffee giant raised its three-year profit and sales outlook during its annual presentation to investors, Bloomberg reported. Analysts were largely positive about the forecast increase, with Jefferies calling the new three-year targets achievable. Starbucks sees earnings per share that could grow by 15 to 20% in each of the next three fiscal years. Comparable sales - a key indicator for the restaurant industry - are expected to grow by 7 to 9 percent.
Starbucks' revenue for the quarter ended June 30, 2022 was $8.150 billion, up 8.72 percent year-over-year. The company's revenue for the twelve months ended June 30, 2022 was $31.983 billion, up 17.94 percent year-on-year. Meanwhile, EPS (earnings per share) for the quarter ended June 30, 2022 was $0.79, down 18.56 percent year-on-year. In contrast, EPS for the twelve months ended June 30, 2022 was $3.54, expressing an increase of 46.89 percent year-on-year. The price-to-earnings ratio for Starbucks shares as of September 13, 2022 was 28.28, while the dividend yield was 2.2 percent.
A look at the chart of Starbucks shares from a technical angle
Source: Conotoxia MT5, D1
The SBUX share price has recently risen from levels previously seen in March 2020. However, it seems that the recent rise can, for the time being, be treated as a correction. Within its framework, two potential technical resistances have been reached. We are talking about the 200-session average and the 38.2 percent abolition of recent declines from the all-time peak. It seems, therefore, that from this point of view, only the overcoming of these places, could change the picture of the company's shares from a technical correction to a possibly larger rebound.
What does Wall Street think of Starbucks shares?
According to MarketScreener, the company has 19 "hold" recommendations, nine "buy" recommendations and zero "sell" recommendations. The average target for the company's shares is at $95.31. The highest recommendation on Wall Street is at $136, while the lowest is $80. Of the recent changes in recommendations, Barclays analysts have raised the target price level to $100 from $96. Citigroup, on the other hand, believes that the right price for the stock could be at $94, according to data presented by MarketScreener.
Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Conotoxia investment service)
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
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