Stephens Initiates Coverage on Starbucks (NASDAQ:SBUX)

Stephens started coverage on shares of Starbucks (NASDAQ:SBUX) in a research note issued on Tuesday, FinViz reports. The firm set an “equal weight” rating and a $39.00 price target on the coffee company’s stock. Stephens‘s price target would indicate a potential downside of 62.64% from the company’s previous close.

A number of other equities analysts have also recently weighed in on the company. DA Davidson reissued a “neutral” rating and issued a $110.00 price target on shares of Starbucks in a research note on Friday. Mizuho dropped their target price on shares of Starbucks from $115.00 to $105.00 and set a “neutral” rating on the stock in a research report on Friday, October 23rd. Melius Research set a $110.00 price target on shares of Starbucks in a report on Monday, August 3rd. Morgan Stanley lowered shares of Starbucks from an “overweight” rating to an “underweight” rating in a report on Monday, August 3rd. Finally, KeyCorp restated a “sector weight” rating on shares of Starbucks in a research report on Friday. Twenty-one investment analysts have rated the stock with a Buy rating, fifteen have assigned a Hold rating and four have given a Sell rating to the company’s stock. According to MarketBeat.com, Starbucks currently has a consensus rating of “Hold” and an average target price of $108.74.

Starbucks Price Performance

Shares of SBUX stock opened at $104.40 on Tuesday. Starbucks has a 12-month low of $77.99 and a 12-month high of $110.51. The firm has a market capitalization of $119.02 billion, a price-to-earnings ratio of 47.24, a price-to-earnings-growth ratio of 1.57 and a beta of 0.98. The business has a 50 day simple moving average of $99.20 and a 200 day simple moving average of $99.77.

Starbucks (NASDAQ:SBUX) last released its quarterly earnings results on Thursday, October 29th. The coffee company reported $0.80 EPS for the quarter, topping analysts’ consensus estimates of $0.72 by $0.08. Starbucks had a net margin of 5.17% and a negative return on equity of 34.10%. The company had revenue of $9.14 billion for the quarter, compared to the consensus estimate of $9.22 billion. During the same period in the previous year, the firm earned $0.52 EPS. Starbucks’s revenue was down 4.5% on a year-over-year basis. On average, equities analysts anticipate that Starbucks will post 3.21 EPS for the current fiscal year.

Insider Buying and Selling at Starbucks

In other news, CEO Brady Brewer sold 2,229 shares of the stock in a transaction that occurred on Friday, September 4th. The shares were sold at an average price of $105.60, for a total value of $235,382.40. Following the completion of the sale, the chief executive officer directly owned 73,149 shares of the company’s stock, valued at $7,724,534.40. This represents a 2.96% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last 90 days, insiders sold 6,687 shares of company stock valued at $685,935. 0.03% of the stock is owned by corporate insiders.

Institutional Investors Weigh In On Starbucks

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in SBUX. BlackRock Inc. purchased a new stake in shares of Starbucks during the second quarter worth $8,504,509,000. State Street Corp increased its position in Starbucks by 3.2% in the 2nd quarter. State Street Corp now owns 49,260,268 shares of the coffee company’s stock worth $5,033,907,000 after purchasing an additional 1,530,497 shares during the last quarter. Bank of America Corp DE acquired a new position in Starbucks in the 2nd quarter worth about $1,581,287,000. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC raised its stake in shares of Starbucks by 26.2% during the 2nd quarter. UBS AM a distinct business unit of UBS ASSET MANAGEMENT AMERICAS LLC now owns 8,506,482 shares of the coffee company’s stock worth $869,277,000 after purchasing an additional 1,767,530 shares in the last quarter. Finally, Bank of New York Mellon Corp purchased a new stake in shares of Starbucks during the 2nd quarter worth about $779,790,000. Hedge funds and other institutional investors own 72.29% of the company’s stock.

Starbucks News Roundup

Here are the key news stories impacting Starbucks this week:

• Positive Sentiment: U.S. customers spent 5.2% more per visit last quarter, according to Morgan Stanley. The increase was attributed to higher-priced beverages, food purchases, premium customization and stronger engagement with Starbucks’ loyalty program, reinforcing confidence in the company’s U.S. recovery. Why Morgan Stanley sees customers spending more at Starbucks
• Positive Sentiment: Management reported continued North American growth in customer visits and spending. New menu items, stronger digital engagement and the Green Apron Service operating initiative helped improve same-store sales and margins, supporting the view that Starbucks’ turnaround is gaining traction. Five insightful analyst questions from Starbucks’s earnings call
• Positive Sentiment: Starbucks exceeded earnings expectations with adjusted EPS of $0.80 versus the $0.72 consensus. BTIG reiterated its Buy rating, while a Seeking Alpha analysis argued that the bearish case is weakening as U.S. operations improve. Starbucks Buy Rating Reiterated at BTIG Research
• Neutral Sentiment: Citigroup raised its price target from $104 to $107 but maintained a Neutral rating, suggesting limited near-term upside and a more cautious view of the recovery. Citigroup raises Starbucks price target
• Neutral Sentiment: Starbucks’ decision to reduce employee coverage for GLP-1 weight-loss medications could lower benefit costs, but may create employee-relations and reputational risks. Employers dropping GLP-1 coverage
• Negative Sentiment: Fiscal fourth-quarter revenue fell 4.5% year over year to $9.14 billion and missed Wall Street expectations. Slower international growth—particularly the transition of China operations to a licensed model—offset stronger U.S. performance and remains the main overhang on the stock. Starbucks fiscal fourth-quarter deep dive

Starbucks Company Profile

Starbucks Corporation is a global specialty coffee company headquartered in Seattle, Washington. Founded in 1971, the company operates and licenses coffeehouses under the Starbucks brand, serving brewed coffee, espresso beverages, teas, cold drinks, food, and other ready-to-consume products.

In addition to its company-operated and licensed stores, Starbucks sells packaged coffee, tea, and single-serve products through grocery retailers, convenience stores, and other distribution channels.