Zacks Investment Research Lowers Starbucks (SBUX) to Sell

Zacks Investment Research cut shares of Starbucks (NASDAQ:SBUX) from a hold rating to a sell rating in a research report released on Tuesday.

According to Zacks, “Starbucks’ shares have underperformed the industry in the last year. Earnings estimates have also remained stable for fiscal 2018 in the last 30 days, limiting upside potential for the stock. Starbucks has been experiencing tepid comps growth in the United States for quite some time now amid persistent decline in the country’s restaurant sales. It reported tepid 2% comps growth in fiscal first quarter in the Americas segment against 3% in the year-ago period. Despite economic growth, consumers increased their spending only modestly on dining out, which resulted in low consumption over the last few quarters. That said, Starbucks is strengthening its portfolio with major innovations, best-in-class loyalty program and digital offerings to counter tepid sales growth. Although these initiatives might benefit the company in the long run, the consequential increment in spending is likely to create pressure on its earnings in the near term.”

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Other equities analysts have also issued research reports about the stock. Oppenheimer reiterated a buy rating and set a $66.00 price objective on shares of Starbucks in a research report on Friday, January 26th. Piper Jaffray reiterated a buy rating and set a $70.00 price objective on shares of Starbucks in a research report on Friday, January 26th. Deutsche Bank reiterated a buy rating and set a $63.00 price objective on shares of Starbucks in a research report on Friday, January 26th. BTIG Research reiterated a buy rating and set a $64.00 price objective on shares of Starbucks in a research report on Friday, January 26th. Finally, Goldman Sachs lowered shares of Starbucks from a conviction-buy rating to a buy rating and lowered their price objective for the company from $73.00 to $68.00 in a research report on Friday, January 26th. One equities research analyst has rated the stock with a sell rating, eleven have issued a hold rating and twenty have assigned a buy rating to the company. The company has an average rating of Buy and an average target price of $64.05.

SBUX stock opened at $58.34 on Tuesday. Starbucks has a 52 week low of $52.58 and a 52 week high of $64.87. The company has a debt-to-equity ratio of 0.79, a current ratio of 1.01 and a quick ratio of 0.81. The firm has a market cap of $83,127.18, a price-to-earnings ratio of 26.88, a price-to-earnings-growth ratio of 1.64 and a beta of 0.64.

Starbucks (NASDAQ:SBUX) last released its quarterly earnings data on Thursday, January 25th. The coffee company reported $0.58 EPS for the quarter, beating the Thomson Reuters’ consensus estimate of $0.57 by $0.01. Starbucks had a net margin of 19.28% and a return on equity of 56.35%. The business had revenue of $6.07 billion during the quarter, compared to analyst estimates of $6.19 billion. During the same quarter last year, the business earned $0.52 earnings per share. Starbucks’s quarterly revenue was up 5.9% compared to the same quarter last year. research analysts anticipate that Starbucks will post 2.49 EPS for the current fiscal year.

In related news, Director Craig Weatherup sold 59,838 shares of the firm’s stock in a transaction dated Tuesday, March 13th. The shares were sold at an average price of $60.10, for a total value of $3,596,263.80. Following the transaction, the director now owns 26,500 shares of the company’s stock, valued at approximately $1,592,650. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this link. Also, Director Myron E. Ullman III sold 25,000 shares of the firm’s stock in a transaction dated Thursday, February 8th. The stock was sold at an average price of $54.52, for a total transaction of $1,363,000.00. Following the completion of the transaction, the director now directly owns 39,000 shares in the company, valued at approximately $2,126,280. The disclosure for this sale can be found here. Insiders sold a total of 247,664 shares of company stock worth $14,243,602 in the last ninety days. 3.40% of the stock is currently owned by insiders.

A number of hedge funds have recently bought and sold shares of SBUX. Optimum Investment Advisors increased its position in Starbucks by 0.4% during the 2nd quarter. Optimum Investment Advisors now owns 22,765 shares of the coffee company’s stock valued at $1,327,000 after purchasing an additional 84 shares during the period. Green Square Capital LLC increased its position in Starbucks by 1.0% during the 2nd quarter. Green Square Capital LLC now owns 9,780 shares of the coffee company’s stock valued at $570,000 after purchasing an additional 100 shares during the period. Balentine LLC increased its position in Starbucks by 4.2% during the 2nd quarter. Balentine LLC now owns 2,725 shares of the coffee company’s stock valued at $159,000 after purchasing an additional 110 shares during the period. RNC Capital Management LLC increased its position in Starbucks by 0.7% during the 2nd quarter. RNC Capital Management LLC now owns 18,259 shares of the coffee company’s stock valued at $1,065,000 after purchasing an additional 134 shares during the period. Finally, Laurel Wealth Advisors Inc. increased its position in Starbucks by 3.3% during the 2nd quarter. Laurel Wealth Advisors Inc. now owns 14,582 shares of the coffee company’s stock valued at $850,000 after purchasing an additional 464 shares during the period. 73.52% of the stock is currently owned by institutional investors.

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Starbucks Company Profile

Starbucks Corporation, together with its subsidiaries, operates as a roaster, marketer, and retailer of specialty coffee worldwide. The company operates in four segments: Americas; China/Asia Pacific; Europe, Middle East, and Africa; and Channel Development. Its stores offer coffee and tea beverages, roasted whole bean and ground coffees, single-serve and ready-to-drink coffee and tea products, and food and snacks; and various food products, such as pastries, breakfast sandwiches, and lunch items.

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