Starbucks (NASDAQ:SBUX)
Starbucks (NASDAQ:SBUX) began trading on Wednesday with a swing to the downside. This was because investors saw the company’s outlook as needing improvement.
The reactions of the experts have been all over the place. A reiteration of the FY23 projection is likely reasonable, according to Dennis Geiger, an analyst at UBS, even if there is volatility in the United States and with China’s economy. He observed that “implied 2H targets across China sss, margins, and EPS could prove conservative.”
Cowen is also of the opinion that the operator of the coffee business purposefully set the bar low about its forecast. According to an updated statement from an analyst named Andrew Charles, “In our view, SBUX’s decision to maintain 2023 EPS & Americas SSS guidance following 2Q’s beat reflects a desire to set a low bar for the new CEO and (optimistically) repurchase the remaining $12B of stock guided for 2023-25E at more favorable levels.”
According to Andrew Strelzik, an analyst at BMO Capital Markets, his company believes there is room for improvement in the fundamental medium-term outlook for Starbucks stock, which has an Outperform rating. Strelzik noted that there is potential for an upside through FY23.
Additionally, Evercore ISI described the guidance Starbucks provided as being conservative in light of a more gradual path to recovery. Looking into the future, market analyst David Palmer increased the price objective for SBUX to $125 while keeping his Outperform rating because he believes the bull case will still be realized.
As a result of the revised EPS forecast for the fiscal year 2023, CFRA has changed its recommendation for Starbucks stock from Buy to Hold. Although SBUX has reaffirmed its guidance, a slowdown in China’s recovery is anticipated in the second half of 2023. In addition, SBUX has seen a slowdown in recent average weekly sales growth in China. This comes amid uncertainties over the recovery of foreign travel and consumer behavior, according to analyst Siye Desta.
At 10:10 AM, Starbucks stock was trading down 7.95%, at $105.36.
Featured Image: Unsplash @ June Andrei George
