Will Starbucks inventory increase as the recovery continues?


[Updated 07/07/2021] Starbucks shares

At the current price of around $ 115 per share, we believe Starbucks (NASDAQ: SBUX) has a growth potential of nearly 8% in the short term according to Trefis Starbucks Rating of $ 124. Due to the coronavirus crisis, SBUX saw its turnover fall by 11% in 2020. The company started a recovery in the fourth quarter of 2020 (end of September 2020) and in the first quarter of 2021 (end of December 2020). The momentum continued into the second quarter of 2021 (ended March 2021) as the company posted revenue of $ 6.7 billion, up 11% year-on-year, while profits fell. are improved to $ 0.58 per share from $ 0.28 per share during the same period of the previous year. Revenue growth was driven by the international market, with same store sales increasing 35% year-on-year. We expect this momentum to continue into 2021 as the pace of vaccination increases.

We are waiting Starbucks revenue increase by 21% to $ 28.5 billion in fiscal 2021 (ending September 2021). In addition, its net profit is expected to increase to $ 3.7 billion, bringing its EPS to $ 3.17 in 2021, which, together with the P / E multiple of 39.1x, will lead to Starbucks Rating of $ 124, which is 10% more than the current market price.

[Updated 11/19/2020] Starbucks stock may not have any benefits?

Having gained more than 73% since the March low, Starbucks stocks (NASDAQ: SBUX) is close to its short-term potential. Our conclusion is based on a detailed comparison of how the SBUX performed against the S&P 500 today as well as during the 2008 recession in our interactive dashboard analysis.

Due to the Covid-19 crisis, Starbucks, an American multinational coffeehouse chain, saw its revenues fall during fiscal year 2020 (ended in September 2020). In fiscal 2020, Starbucks posted higher profit with EPS of $ 0.79 and total revenue of $ 23.5 billion, down 11% year-on-year. In addition, the company reported cash inflows of $ 1.6 billion from operating activities for the year.

We are waiting Starbucks revenue to recover after a year affected by Covid and increase by 21% to $ 28.5 billion for fiscal 2021. In addition, its net profit is expected to recover to $ 3.7 billion for fiscal 2021, the EPS to be $ 3.17, coupled with the P / E multiple of 32.3x will lead to a Starbucks Rating about $ 102.

[Updated 03/25/2020] Will Starbucks stock rebound 50% after coronavirus?

StarbucksThe stock (NASDAQ: SBUX) fell from around $ 75 on March 6 to $ 65 yesterday March 24 – a 14% drop (compared to an 18% drop in the S&P 500 during the same period). The World Health Organization declared a global health emergency at the end of January in light of the spread of the coronavirus. SBUX stock was down 23% from its closing price above $ 84 on Friday, Jan.31 (vs. a roughly 27% drop in the S&P 500).

Looking back at the 2008 financial crisis, we see that SBUX stock fell from levels of around $ 11 in October 2007 (the pre-crisis peak) to less than $ 4 in March 2009 (as the markets bottomed out) – implying that SBUX stock has lost up to 65% of its approximate pre-crisis peak. This marked a larger drop than the broader S&P, which fell as much as 51%. However, the SBUX recovered sharply from the 2008 crisis, reaching levels of nearly $ 10 in early 2010, increasing 152% between March 2009 and January 2010. In comparison, the S&P rebounded by around 48%. over the same period.

On Monday, March 9, the stock market entered a phase of extreme volatility, with two massive sell-offs on Monday and Thursday separated by days of partial recovery. Overall, two distinct trends were behind the recent massive sell-off. First, the growing number of coronavirus cases outside of China is raising concerns about a global economic slowdown. Second, crude oil prices fell more than 20% after Saudi Arabia increased production.

SBUX’s stock has suffered as states and countries are stranded. People don’t meet friends and colleagues or go out with family for breakfast, drinks, lunch or dinner. Restaurants and food outlets only operate in take-out mode and many are closed. Besides the drop in demand, the supply chain across the world is suffering, which will also weigh on sales. We believe Starbucks second and third quarter results will confirm this reality with lower international and US revenues.

The actual recovery and its timing depend on the wider containment of the spread of the coronavirus. Our dashboard Trends in Covid-19 cases in the United States provides insight into the spread of the pandemic in the United States and contrasts with trends in Brazil and Russia. With investors focusing their attention on the 2021 results, valuations become important in finding value.

What if you were looking for a more balanced portfolio instead? here is a high quality wallet to beat the market, with a return of over 100% since 2016, compared to 55% for the S&P 500. Comprised of companies with strong revenue growth, healthy earnings, plenty of liquidity and low risk, it has outperformed the market in its together, year after year, consistently.

See everything Featured analyzes from Trefis and Download Trefis data here

Previous What is bad credit and can I get a car loan with it?
Next Meeting in the Clouds - Eugene Weekly