{"id":3469,"date":"2023-05-03T02:16:07","date_gmt":"2023-05-03T06:16:07","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/starbucks-stock-to-likely-trade-lower-post-q2\/"},"modified":"2023-05-03T02:16:08","modified_gmt":"2023-05-03T06:16:08","slug":"starbucks-stock-to-likely-trade-lower-post-q2","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=3469","title":{"rendered":"Starbucks Stock To Likely Trade Lower Post Q2"},"content":{"rendered":"
\n[Note: Starbucks
\n SBUX
\n <\/fbs-ticker>\u2019 fiscal year 2022 ended October 2, 2022]\n

Starbucks stock<\/strong> (NASDAQ
\n NDAQ
\n <\/fbs-ticker>: SBUX), the world\u2019s leading roaster, marketer, and retailer of specialty coffee worldwide, is scheduled to report its Q2 2023 results on Tuesday, May 2. We expect SBUX stock to trade lower compared to the market due to revenues and earnings likely missing expectations marginally in its second-quarter results. Q1 consolidated operating margin contracted 60 basis points from the prior year to 14.5%, primarily driven by investments in growth in labor, part of which represent the reinvention plan, inflation, and deleveraging in China. We expect a similar trend to continue into the fiscal second quarter as well. China, Starbucks\u2019 fastest-growing region, was decimated by Covid lockdowns. And when restrictions eased, cases of the disease started spiking. Comps in China, where there are currently 6,090 Starbucks stores, were down 29% year-over-year (y-o-y) in the quarter.<\/p>\n

Despite macroeconomic headwinds and inflation, the company reiterated its fiscal 2023 financial targets of 11% revenue growth (at the midpoint) and adjusted EPS growth of at least 15%. Starbucks expects its U.S. comparable sales to grow by as much as 9% in 2023. It also anticipates its sales in China will rebound as the country eases its Covid restrictions. Additionally, Starbucks intends to expand its global store count by roughly 7%, fueled by growth in its international markets.<\/p>\n

Our forecast indicates that Starbucks\u2019 valuation is $103 per share, which is 10% lower than the current market price. Look at our interactive dashboard analysis on Starbucks Earnings Preview:<\/strong> What To Expect in Fiscal Q2?<\/strong> for more details.<\/p>\n

<\/fbs-ad><\/p>\n

(1) Revenues expected to be slightly below consensus estimates<\/strong><\/p>\n

Trefis estimates Starbucks\u2019 Q2 2023 revenues to be around $8.2 Bil, slightly below the consensus estimate. The coffee king\u2019s adjusted revenue rose 8% y-o-y to $8.7 billion in Q1. While transactions at Chinese Starbucks fell, strong growth in the restaurant chain\u2019s core U.S. market has helped to offset Covid-related declines in China. On a global level, comps rose 5% in Q1 thanks to a higher average transaction size. The U.S. saw 10% growth in comp sales and the international market comps were up double-digits internationally (excluding China). The business now has 30.4 million 90-day active rewards members in the U.S., up 15% y-o-y. And customers loaded their accounts with $3.3 billion of funds during the fiscal first quarter, demonstrating how powerful the brand still is. Also, the company opened 459 net new stores in Q1, ending the period with 36,170 stores globally – 51% company-operated and 49% licensed.<\/p>\n

The company believes the business will have 55,000 locations worldwide by 2030. The important question here is can the brand continue to expand since it is already ubiquitous? The coffee giant\u2019s management could likely be overly optimistic about its long-term expansion prospects.<\/p>\n

(2) EPS is also likely to miss the consensus estimates<\/strong><\/p>\n

Starbucks\u2019 Q2 2023 earnings per share is expected to come in at 64 cents per Trefis analysis, slightly below the consensus estimate. Q1 EPS was $0.75, up 4% from the prior year. While China\u2019s recovery was expected to be nonlinear, the headwinds in Q1 were larger than estimated by approximately $0.06 due to the unforeseen changes in Covid restriction and infection spikes.<\/p>\n

(3) Stock price estimate lower than the current market price<\/strong><\/p>\n

Going by our Starbucks Valuation, with an EPS estimate of around $3.45 and a P\/E multiple of 29.9x in fiscal 2023, this translates into a price of $103, which is 10% lower than the current market price.<\/p>\n

It is helpful to see how its peers stack up. SBUX Peers shows how Starbucks\u2019 stock compares against peers on metrics that matter. You will find other useful comparisons for companies across industries at Peer Comparisons.<\/p>\n

What if you\u2019re looking for a more balanced portfolio instead? Our high-quality portfolio<\/strong> and multi-strategy portfolio<\/strong> have beaten the market consistently since the end of 2016.<\/p>\n

Invest with Trefis <\/strong>Market Beating Portfolios<\/strong><\/p>\n

See all Trefis <\/strong>Price Estimates<\/strong><\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

[Note: Starbucks SBUX \u2019 fiscal year 2022 ended October 2, 2022] Starbucks stock (NASDAQ NDAQ : SBUX), the world\u2019s leading roaster, marketer, and retailer of specialty coffee worldwide, is scheduled to report its Q2 2023 results on Tuesday, May 2. We expect SBUX stock to trade lower compared to the market due to revenues and […]<\/p>\n","protected":false},"author":1,"featured_media":3470,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-3469","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-markets","tag-featured"],"yoast_head":"\nStarbucks Stock To Likely Trade Lower Post Q2 | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Starbucks stock (NASDAQ NDAQ : SBUX), the world\u2019s leading roaster, marketer, and retailer of specialty coffee worldwide, is scheduled to report its Q2\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ifintechworld.com\/?p=3469\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" 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