Starbucks (SBUX) Lifted to “Hold” at Zacks Investment Research

Zacks Investment Research upgraded shares of Starbucks (NASDAQ:SBUX) from a sell rating to a hold rating in a research report report published on Friday morning.

According to Zacks, “Starbucks’ shares have outperformed the industry in the last six months. Earnings estimates, however, have 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 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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Several other brokerages have also recently weighed in on SBUX. Wedbush reiterated a buy rating and set a $70.00 price target on shares of Starbucks in a research report on Monday, January 22nd. They noted that the move was a valuation call. Oppenheimer reiterated a buy rating and set a $66.00 price target on shares of Starbucks in a research report on Friday, January 19th. Telsey Advisory Group reiterated an outperform rating and set a $70.00 price target (up from $66.00) on shares of Starbucks in a research report on Friday, January 19th. Barclays reiterated an equal weight rating and set a $65.00 price target (up from $58.00) on shares of Starbucks in a research report on Tuesday, January 16th. Finally, Goldman Sachs cut Starbucks from a conviction-buy rating to a buy rating and reduced their price target for the company from $73.00 to $68.00 in a research report on Friday, January 26th. Thirteen investment analysts have rated the stock with a hold rating and nineteen have given a buy rating to the stock. The company currently has an average rating of Buy and a consensus target price of $64.17.

Starbucks stock opened at $58.00 on Friday. The company has a debt-to-equity ratio of 0.79, a current ratio of 1.01 and a quick ratio of 0.81. Starbucks has a 52 week low of $52.58 and a 52 week high of $64.87. The stock has a market cap of $81,524.80, a P/E ratio of 28.16, a PEG ratio of 1.61 and a beta of 0.64.

Starbucks (NASDAQ:SBUX) last released its earnings results on Thursday, January 25th. The coffee company reported $0.58 EPS for the quarter, topping the Zacks’ consensus estimate of $0.57 by $0.01. Starbucks had a return on equity of 56.35% and a net margin of 19.28%. The firm had revenue of $6.07 billion during the quarter, compared to the consensus estimate of $6.19 billion. During the same quarter in the previous year, the company posted $0.52 earnings per share. The company’s revenue was up 5.9% compared to the same quarter last year. equities analysts anticipate that Starbucks will post 2.49 EPS for the current fiscal year.

In other news, insider Clifford Burrows sold 162,826 shares of the business’s stock in a transaction that occurred on Wednesday, January 31st. The stock was sold at an average price of $57.02, for a total value of $9,284,338.52. Following the completion of the sale, the insider now directly owns 331,829 shares in the company, valued at $18,920,889.58. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. Also, Director Craig Weatherup sold 59,838 shares of the business’s stock in a transaction that occurred on 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 completion of the sale, the director now owns 26,500 shares of the company’s stock, valued at $1,592,650. The disclosure for this sale can be found here. Insiders sold 247,664 shares of company stock valued at $14,243,602 over the last 90 days. Company insiders own 3.40% of the company’s stock.

Several institutional investors and hedge funds have recently modified their holdings of SBUX. Parnassus Investments CA purchased a new stake in shares of Starbucks during the third quarter worth approximately $498,863,000. Magellan Asset Management Ltd increased its position in shares of Starbucks by 18.1% during the fourth quarter. Magellan Asset Management Ltd now owns 30,912,781 shares of the coffee company’s stock worth $1,775,321,000 after purchasing an additional 4,744,675 shares in the last quarter. Capital International Investors increased its position in shares of Starbucks by 28.3% during the third quarter. Capital International Investors now owns 21,269,515 shares of the coffee company’s stock worth $1,142,386,000 after purchasing an additional 4,696,452 shares in the last quarter. Harding Loevner LP purchased a new stake in shares of Starbucks during the third quarter worth approximately $128,044,000. Finally, Lazard Asset Management LLC increased its position in shares of Starbucks by 300.6% during the fourth quarter. Lazard Asset Management LLC now owns 4,051,366 shares of the coffee company’s stock worth $232,669,000 after purchasing an additional 3,040,030 shares in the last quarter. Hedge funds and other institutional investors own 73.47% of the company’s stock.

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About Starbucks

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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