Starbucks

By Heather Haddon Starbucks’s coffee sales are losing some steam. The world’s largest coffee chain said over the quarter ended Dec. 31 that its global same-store sales grew by 5%, down from the previous quarter and below analysts’ expectations. The Seattle company said it generated a record $9.4 billion in sales for its fiscal first quarter, up 8% from the prior-year period but missing analysts’ expectations of $9.6 billion. Earnings were 90 cents a share when accounting for one-time items. Analysts polled by FactSet expected 93 cents a share. Investors’ concerns have grown over Starbucks’s business in recent months, particularly in the U.S. and China where the coffee giant faces increasing competition. Chief executive Laxman Narasimhan said at a December investor conference that the company’s business faced headwinds, including geopolitical conflict and slowing U.S. consumer spending. Starbucks shares were down 14% over the last 12 months as of Monday’s close. […]

By Heather Haddon Starbucks’s sales are slowing — and it is fighting back by giving customers deals. The world’s largest coffee chain said it is battling challenges in the U.S. and China, as competition from rivals offering promotions grew in recent months and customers reduced visits. Starbucks Tuesday reduced its full-year forecast for revenue and same-store sales growth, saying January sales were softer than expected and that improvements will take time. The company maintained its earnings growth outlook for the year. Chief Executive Laxman Narasimhan said on a Tuesday investor call that lower sales in its Middle East stores hurt its performance. Occasional U.S. Starbucks customers also purchased beverages less frequently in the afternoon during the quarter, cutting into sales. “There was an impact in the quarter, and it will take some time to normalize,” Narasimhan said. Starbucks reported that over the three months ended Dec. 31, its global same-store

Dunkin’s busiest day of 2023 was on National Donut Day which falls of the first Friday in June, while Starbucks’ busiest traffic day was November 4, the first Saturday after its holiday menu launched, according to a report from Placer.ai. Dunkin’ gives out a free donut with a drink purchase on National Donut Day, and on Friday June 2 it saw a near 50% increase in visits compared with its 2023 daily average, the report said. Starbucks meanwhile saw visits spike 68% on November 4 compared with its 2023 daily average, though Black Friday wasn’t far behind, with visits jumping almost 65% that day, according to the Placer.ai data.

Starbucks (SBUX) is expected to see slowing US momentum and “pressured” China sales trends in fiscal Q1, along with potential updates to fiscal year 2024 guidance, UBS said in a note. The coffeehouse chain will report its earnings results on Tuesday. “Concerns about slowing US trends to exit the quarter and more difficult F2Q comparisons have investors mixed on whether FY24 guidance for comps of 5% to 7% and adjusted EPS of 15% to 20% will be reduced or reiterated,” UBS analysts said. They said valuation of the stock is undemanding, and the company remains well positioned long term with an attractive growth profile, but they kept their neutral rating for now, pointing to uncertainty around expected US and China sales pressures. Price: 93.09, Change: +0.29, Percent Change: +0.31

Starbucks’ (SBUX) soft same store sales growth in H1 may continue to put pressure on the company’s shares until there is improved visibility in H2, Wedbush said in a note Thursday. Wedbush said it believes that the company’s current valuation aligns with the lower end of management’s long-term targets, considering company-specific factors, on one hand, and “declining visibility into the impact of macro headwinds on near- and medium-term U.S. and International SSS growth rates,” on the other. Same store sales growth for fiscal Q1 is likely to be slightly below to in-line with consensus of 6.2%, the note said. Wedbush lowered its estimate for fiscal Q1 Americas SSS growth to 5% from 6%, and also lowered fiscal-year 2024 Americas SSS growth estimate to 5.3% from 5.5%, the note said. The firm maintained Starbucks’ operating margin estimate for 2024 at 16.9%, which is slightly below the consensus of 17%, and also

Starbucks (NASDAQ:SBUX) Stock Analyst Ratings Date Upside/Downside Analyst Firm Price Target Change Rating Change Previous / Current Rating 01/19/2024 7.29% Piper Sandler $107 → $100 Maintains Neutral 01/18/2024 1.93% Wedbush $100 → $95 Maintains Neutral 01/16/2024 — Gordon Haskett Downgrades Buy → Hold 01/16/2024 28.75% Morgan Stanley $112 → $120 Upgrades Equal-Weight → Overweight 12/20/2023 14.8% HSBC → $107 Initiates Coverage On → Hold 11/06/2023 13.73% Wedbush $100 → $106 Maintains Neutral 10/23/2023 24.46% Barclays $123 → $116 Maintains Overweight 10/19/2023 26.6% Deutsche Bank → $118 Initiates Coverage On → Buy 10/12/2023 7.29% UBS $110 → $100 Maintains Neutral 10/11/2023 9.44% Morgan Stanley $104 → $102 Maintains Equal-Weight 10/05/2023 7.29% Citigroup $104 → $100 Maintains Neutral 09/25/2023 11.58% Citigroup $112 → $104 Maintains Neutral 09/22/2023 14.8% TD Cowen → $107 Reiterates Market Perform → Market Perform 09/20/2023 14.8% TD Cowen → $107 Reiterates Market Perform → Market Perform 09/19/2023 14.8%

Piper Sandler analyst Brian Mullan maintains Starbucks (NASDAQ:SBUX) with a Neutral and lowers the price target from $107 to $100.

Starbucks’ (SBUX) cost levers could help the company deliver on earnings growth and likely get more management focus, Morgan Stanley said Tuesday. The brokerage upgraded its rating on the coffee chain’s stock to overweight from equal-weight and raised its price target to $120 from $112. “While US sales slowing is a legitimate concern, available product, tech, store levers remain interesting, in our view, and discounted somewhat by the market,” Morgan Stanley said in a note. The firm said it expects China headwinds to persist for the time being, but are likely fully priced in. “[Starbucks] is one of few companies we cover we’d consider to still be under-earning vs its potential, and it has a history of working its way out of tough spots,” Morgan Stanley said. For 2024, the firm expects Starbucks’ per-share earnings of $4.05, compared with the market consensus for $4.14, according to the note.

Starbucks (NASDAQ:SBUX) Stock Analyst Ratings Date Upside/Downside Analyst Firm Price Target Change Rating Change Previous / Current Rating 01/16/2024 — Gordon Haskett Downgrades Buy → Hold 01/16/2024 30.35% Morgan Stanley $112 → $120 Upgrades Equal-Weight → Overweight 12/20/2023 16.23% HSBC → $107 Initiates Coverage On → Hold 11/06/2023 15.14% Wedbush $100 → $106 Maintains Neutral 10/23/2023 26% Barclays $123 → $116 Maintains Overweight 10/19/2023 28.18% Deutsche Bank → $118 Initiates Coverage On → Buy 10/12/2023 8.62% UBS $110 → $100 Maintains Neutral 10/11/2023 10.8% Morgan Stanley $104 → $102 Maintains Equal-Weight 10/05/2023 8.62% Citigroup $104 → $100 Maintains Neutral 09/25/2023 12.97% Citigroup $112 → $104 Maintains Neutral 09/22/2023 16.23% TD Cowen → $107 Reiterates Market Perform → Market Perform 09/20/2023 16.23% TD Cowen → $107 Reiterates Market Perform → Market Perform 09/19/2023 16.23% TD Cowen $117 → $107 Downgrades Outperform → Market Perform 08/02/2023 19.49% Stifel $117 → $110 Maintains

Starbucks (NASDAQ:SBUX) Stock Analyst Ratings Date Upside/Downside Analyst Firm Price Target Change Rating Change Previous / Current Rating 01/16/2024 29.59% Morgan Stanley $112 → $120 Upgrades Equal-Weight → Overweight 12/20/2023 15.55% HSBC → $107 Initiates Coverage On → Hold 11/06/2023 14.47% Wedbush $100 → $106 Maintains Neutral 10/23/2023 25.27% Barclays $123 → $116 Maintains Overweight 10/19/2023 27.43% Deutsche Bank → $118 Initiates Coverage On → Buy 10/12/2023 7.99% UBS $110 → $100 Maintains Neutral 10/11/2023 10.15% Morgan Stanley $104 → $102 Maintains Equal-Weight 10/05/2023 7.99% Citigroup $104 → $100 Maintains Neutral 09/25/2023 12.31% Citigroup $112 → $104 Maintains Neutral 09/22/2023 15.55% TD Cowen → $107 Reiterates Market Perform → Market Perform 09/20/2023 15.55% TD Cowen → $107 Reiterates Market Perform → Market Perform 09/19/2023 15.55% TD Cowen $117 → $107 Downgrades Outperform → Market Perform 08/02/2023 18.79% Stifel $117 → $110 Maintains Hold 08/02/2023 12.31% Morgan Stanley $104 → $104

Morgan Stanley analyst Brian Harbour upgrades Starbucks (NASDAQ:SBUX) from Equal-Weight to Overweight and raises the price target from $112 to $120.

Many investors seem to be bracing for Starbucks to miss Wall Street’s comparable sales estimates in fiscal 1Q amid indications of a slowdown in U.S. demand, Baird analysts say in a research note. The analysts are lowering their own estimates based on management’s fairly cautious commentary about consumer spending during a conference presentation in December, as well as its unusually aggressive approach to promotional activity during the high-volume holiday season. Those promos and signs of a step-up in personalized marketing suggest Starbucks may have been reacting to the more challenging spending backdrop, the analysts say.