Starbucks (SBUX) Downgraded to Hold at Zacks Investment Research

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Zacks Investment Research downgraded shares of Starbucks (NASDAQ:SBUX) from a buy rating to a hold rating in a research report sent to investors on Monday morning, Zacks.com reports.

According to Zacks, “Shares of Starbucks have outperformed the industry in the past six months. The momentum is likely to continue as the company reported solid second-quarter fiscal 2019 earnings and also raised its full-year view. Notably, earnings surpassed the estimates in all of the trailing four quarters. For fiscal 2019, non-GAAP EPS is expected to be $2.75-$2.79, up from $2.68-$2.73 mentioned earlier. Robust Americas and CAP comps too bode well. Meanwhile, Starbucks' business is rapidly growing in China, courtesy of innovative store designs, local product innovations and the success of MSR program. Also, operating fundamentals such as solid global footprint, successful innovations, best-in-class loyalty program and digital offerings are encouraging. Again, digital initiatives like mobile order/pay and delivery services can further stimulate robust sales trends. However, operating margin contraction over the past few quarters has been a major concern.”

SBUX has been the topic of several other reports. Wells Fargo & Co downgraded Starbucks from an outperform rating to a market perform rating and dropped their price objective for the stock from $83.00 to $80.00 in a report on Friday, April 26th. They noted that the move was a valuation call. BMO Capital Markets lifted their price objective on Starbucks from $60.00 to $70.00 and gave the stock a market perform rating in a report on Friday, April 26th. Wedbush restated a hold rating and set a $70.00 price objective on shares of Starbucks in a report on Thursday, April 18th. Oppenheimer restated an outperform rating and set a $72.00 price objective (up from $70.00) on shares of Starbucks in a report on Friday, January 25th. Finally, Telsey Advisory Group restated a market perform rating and set a $80.00 price objective (up from $70.00) on shares of Starbucks in a report on Monday, May 6th. One investment analyst has rated the stock with a sell rating, twelve have assigned a hold rating, fourteen have issued a buy rating and one has given a strong buy rating to the company. The company currently has an average rating of Buy and an average target price of $73.88.

Shares of NASDAQ:SBUX opened at $78.90 on Monday. The stock has a market cap of $94.18 billion, a P/E ratio of 32.60, a P/E/G ratio of 2.18 and a beta of 0.51. The company has a current ratio of 0.94, a quick ratio of 0.67 and a debt-to-equity ratio of 7.73. Starbucks has a one year low of $47.37 and a one year high of $79.24.

Starbucks (NASDAQ:SBUX) last announced its earnings results on Thursday, April 25th. The coffee company reported $0.60 EPS for the quarter, beating the consensus estimate of $0.56 by $0.04. The business had revenue of $6.31 billion for the quarter, compared to the consensus estimate of $6.33 billion. Starbucks had a negative return on equity of 494.61% and a net margin of 11.87%. The company’s revenue was up 4.5% on a year-over-year basis. During the same period last year, the business posted $0.53 EPS. On average, equities analysts forecast that Starbucks will post 2.78 earnings per share for the current year.

The company also recently announced a quarterly dividend, which will be paid on Friday, May 24th. Stockholders of record on Thursday, May 9th will be given a $0.36 dividend. The ex-dividend date is Wednesday, May 8th. This represents a $1.44 annualized dividend and a dividend yield of 1.83%. Starbucks’s payout ratio is 59.50%.

Institutional investors and hedge funds have recently modified their holdings of the company. Cipher Capital LP acquired a new position in Starbucks during the 4th quarter valued at approximately $2,261,000. Mark Sheptoff Financial Planning LLC acquired a new position in Starbucks during the 4th quarter valued at approximately $32,000. Mackay Shields LLC boosted its position in Starbucks by 55.0% during the 4th quarter. Mackay Shields LLC now owns 625,131 shares of the coffee company’s stock valued at $40,259,000 after purchasing an additional 221,699 shares during the period. Rainier Group Investment Advisory LLC boosted its position in Starbucks by 6.9% during the 4th quarter. Rainier Group Investment Advisory LLC now owns 11,013 shares of the coffee company’s stock valued at $709,000 after purchasing an additional 708 shares during the period. Finally, 10 15 Associates Inc. boosted its position in Starbucks by 2.7% during the 4th quarter. 10 15 Associates Inc. now owns 241,207 shares of the coffee company’s stock valued at $15,534,000 after purchasing an additional 6,247 shares during the period. Institutional investors own 74.73% of the company’s stock.

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 beverages, iced tea, and food and snacks; and various food products, such as pastries, breakfast sandwiches, and lunch items.

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