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Seattle, Washington-based Starbucks Corporation (SBUX) roasts, sells and distributes high-quality coffee globally. Valued at $110 billion by market cap, the company offers packaged and single-serve coffees and teas, beverage-related ingredients, and ready-to-drink beverages, as well as produces and sells bottled coffee drinks and a line of ice creams through over 40,000 stores worldwide under the brands Starbucks Coffee, Teavana, Seattle's Best Coffee, Ethos, and Starbucks Reserve.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and SBUX definitely fits that description, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the restaurants industry. With over 41,000 stores globally, SBUX's strong brand drives growth and its diverse footprint and international presence fuel market dominance.
Despite its notable strength, SBUX slipped 11.4% from its 52-week high of $108.88, achieved on May 14. Over the past three months, SBUX stock declined 1.5%, underperforming State Street Consumer Discretionary Select Sector SPDR ETF’s (XLY) 1.1% gains during the same time frame.
Shares of SBUX rose 14.6% on a YTD basis and climbed 15% over the past 52 weeks, outperforming XLY’s YTD losses of 1% and 10.6% returns over the last year.
To confirm the bullish trend, SBUX has been trading above its 200-day moving average since early January, with slight fluctuations. However, the stock is trading below its 50-day moving average recently.
On Apr. 28, SBUX reported its Q2 results, and its shares closed up by 8.5% in the following trading session. Its adjusted EPS of $0.50 topped Wall Street expectations of $0.44. The company’s revenue was $9.5 billion, beating Wall Street forecasts of $9.2 billion. SBUX expects full-year adjusted EPS in the range of $2.25 to $2.45.
In the competitive arena of restaurants, Luckin Coffee Inc. (LKNCY) has lagged behind SBUX, with a 2.9% downtick on a YTD basis and a 1.6% loss over the past 52 weeks.
Wall Street analysts are reasonably bullish on SBUX’s prospects. The stock has a consensus “Moderate Buy” rating from the 37 analysts covering it, and the mean price target of $104.56 suggests a potential upside of 8.3% from current price levels.
