Starbucks Corporation (SBUX): What is the Risk Factor?

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Starbucks Corporation (NASDAQ:SBUX) saw an upside of 1.11% to close Monday at $106.21 after adding $1.17 on the day. The 5-day average trading volume is 6,236,520 shares of the company’s common stock. It has gained $107.60 in the past week and touched a new high 1 time within the past 5 days. An average of 5,804,515 shares of the company has been traded in the last 20 days, and the 50-day average volume stands at 6,431,310.

SBUX’s 1-month performance is 8.38% or $7.94 on its low of $98.21 reached on 12/27/22. The company’s shares have touched a 52-week low of $68.39 and high of $107.60, with the stock’s rally to the 52-week high happening on 01/17/23. YTD, SBUX has achieved 7.07% or $7.01 and has reached a new high 6 times. However, the current price is down -1.29% from the 52-week high price.

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Insider Transactions

SBUX stock investors last saw insider trading activity on Jan 09.Ruggeri Rachel (evp, cfo) most recently sold 3,960 shares at $106.50 per share on Jan 09. This transaction cost the insider $421,740. Director, Shih Clara, sold 7,000 shares at a price of $103.29 on Dec 08. Then, on Nov 23, group president International Conway Michael Aaron sold 15,320 shares at a price of $99.14 per share. This transaction amounted to $1,518,809.

Valuation Metrics

SBUX stock has a beta of 0.91. Moving on to other valuation ratios, the trailing price-to-sales (P/S) ratio is 3.75 while the price to cash flow ratio at 413.40.

Starbucks Corporation’s quick ratio for the period ended June 29 was 0.50, with the current ratio over the same period at 0.80. In terms of profitability, the gross margin trailing 12 months is 26.00%. The firm’s gross profit as reported stood at $21.93 billion against revenue of $32.25 billion.

Earnings Surprise

For the quarterly period ending June 29 this year, Starbucks Corporation’s cash and short-term investments amounted to $87.4 million against total debt of $23.9 billion. Net income and sales went up compared to those figures reported in the previous quarter. Net income shrunk -12.33% to $1.57 billion, while revenue of $912.9 million was 41.88% off the previous quarter. Analysts expected SBUX to announce $0.75 per share in earnings in its latest quarter, but it posted $0.84, representing a 12.00% surprise. EBITDA for the quarter stood at more than $1.56 billion. SBUX stock balance sheet for the quarter ending June 29 shows that total liabilities totaled 36.68 billion, with total debt at $23.9 billion. Shareholders hold equity totaling $1.15 billion.

Let’s look briefly at Starbucks Corporation (SBUX) price momentum from a technical analysis perspective. The 9-day relative strength index as at close on 23 January was 60.90% to suggest the stock is trending Neutral, with historical volatility in this time period at 15.25%.

The stock’s 5-day moving average is $105.45, reflecting a -0.95% or -$1.02 change from its current price. SBUX is currently trading +7.64% above its 20-day SMA, +26.26% above its 100-day SMA. However, the stock’s current price level is away from the SMA50 by +14.51% and SMA200 by+26.26%.

Stochastic %K and %D was 73.33% and 72.99% and the average true range (ATR) pointed at 1.96. The RSI (14) points at 60.79%, while the 14-day stochastic is at 82.95% with the period’s ATR at 2.02. The stock’s 9-day MACD Oscillator is pointing at -0.68 and -0.10 on the 14-day charts.

Analyst Ratings

In the most recent analyst report for Starbucks Corporation (NASDAQ: SBUX), Jefferies downgraded it to a Hold rating. They previously had a Buy rating on the stock. Analysts offering their rating for SBUX stock have a consensus rating for the stock as Overweight. Currently, 0 brokerage advisors rate SBUX as a “sell,”, while 19 advise that investors “Hold.” 0 analysts have rated the stock as underweight. 3 rates the stock as overweight while 12 have offered a “buy” rating.

What is SBUX’s price target for the next 12 months?

Analysts have a consensus price target ranging from a low of $88.00 and a high of $125.00, with their median price target at $105.50. Looking at these predictions, the average price target given by analysts is for Starbucks Corporation (SBUX) stock is $107.00.

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