Starbucks Corporation (NASDAQ: SBUX) has received an updated price target from Mizuho Securities, which raised its forecast from $86.00 to $95.00 in a research note published on Monday. Despite the increase, Mizuho maintains a neutral rating on the stock, indicating limited upside potential from current levels.
Several other analysts have recently weighed in on Starbucks, reflecting a mixed sentiment within the investment community. BTIG Research reaffirmed a “buy” rating on the company’s stock, setting a price objective of $105.00 in a note dated January 22, 2024. Conversely, Dbs Bank downgraded its rating from “hold” to “strong sell” on November 7, 2023. Royal Bank of Canada set a target price of $100.00 with an “outperform” rating, while Piper Sandler adjusted its price target down to $100.00 but retained an “overweight” rating. Citigroup also upgraded Starbucks from “neutral” to “positive” in a note released on January 15, 2024.
Overall, eighteen analysts have rated Starbucks as a buy, while seven have issued a hold rating, and three have assigned a sell rating. According to MarketBeat data, the consensus rating for Starbucks is “Moderate Buy” with an average price target of $103.50.
Stock Performance and Financial Results
On Monday, shares of Starbucks opened at $96.33, reflecting a 1.3% decline. Over the past year, the stock has fluctuated between a low of $75.50 and a high of $117.46. The company’s market capitalization stands at $109.54 billion, with a price-to-earnings (P/E) ratio of 58.74 and a price-to-earnings-growth (PEG) ratio of 2.07. The firm reported a negative return on equity of 31.32% and a net margin of 4.99%.
Starbucks released its latest quarterly earnings results on October 29, 2023, revealing earnings per share (EPS) of $0.52, which fell short of analysts’ expectations of $0.55 by $0.03. The company generated revenue of $9.57 billion, exceeding the consensus estimate of $9.41 billion. Year-over-year, revenue increased by 5.5%. Analysts expect Starbucks to post EPS of $2.99 for the current fiscal year.
Dividends and Insider Transactions
In addition to the earnings report, Starbucks announced a quarterly dividend of $0.62 per share, set to be paid on February 27, 2024. Investors of record on February 13, 2024 will receive this dividend, which translates to an annualized total of $2.48 and a yield of 2.6%. The current dividend payout ratio (DPR) is 151.22%.
In related news, Director Jorgen Vig Knudstorp acquired 11,700 shares of Starbucks stock on November 10, 2023, at an average price of $85.00 per share, amounting to a total investment of $994,500. Following this transaction, Knudstorp holds 53,096 shares valued at around $4.51 million, marking a 28.26% increase in his position. Currently, insiders own 0.09% of the company’s stock.
Institutional investors continue to play a significant role in Starbucks, holding approximately 72.29% of the company’s stock. Notably, River Street Advisors LLC increased its stake by 0.8% during the fourth quarter, now owning 13,516 shares valued at $1.14 million. Other firms such as Patriot Financial Group Insurance Agency LLC and Mirae Asset Global Investments Co. Ltd. also expanded their holdings, reflecting continued confidence in the coffee giant.
As Starbucks navigates a complex landscape of analyst opinions and performance metrics, the company is focusing on enhancing customer experience. Under the leadership of CEO Brian Niccol, who has invested in barista training and store improvements, Starbucks aims to drive its “Back to Starbucks” recovery strategy.
In summary, while Mizuho’s new price target indicates cautious optimism, the mixed ratings from analysts and the company’s recent financial performance highlight the challenges Starbucks faces in maintaining growth and meeting investor expectations.
