Benzinga - by Chris Katje, Benzinga Staff Writer.
Coffee chain Starbucks Corporation (NASDAQ:SBUX) is set to report fourth-quarter financial results before the market open Thursday. Here are the analyst estimates, commentary and items for investors to watch when the report goes live.
Starbucks Earnings Estimates: Analysts expect Starbucks to report fourth-quarter revenue of $9.29 billion, according to data from Benzinga Pro.
The company reported revenue of $8.41 billion in the fourth quarter of last year. Starbucks has beaten revenue estimates from analysts in four of the last seven quarters.
Analysts see Starbucks reporting fourth-quarter earnings per share of 97 cents, compared to 81 cents in the previous year's fourth quarter. The company has beaten EPS estimates in four of the last five quarters.
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What Starbucks Analysts are Saying: Starbucks could present a favorable risk/reward for investors going into the earnings report, Morgan Stanley analyst Brian Harbour said.
The analyst, who has an Equal-weight rating and price target of $102, is cautious on the stock given the performance year-to-date.
"We'd argue risk/reward skew is more favorable today, with de-rating on NTM numbers and share price weakness since April, despite effectively very little change to the earnings outlook since that time," Harbour said.
The analyst said Starbucks has had positive traffic growth in the United States in 2023.
Concerns about China growth and competition could also be priced into the shares after a decline in 2023, he said.
"The bull case may rest on the idea that as a formidable global consumer brand, SBUX has worked its way out of challenged periods in the past and can do so again as new management gains its footing."
Here's a look at other analyst ratings for Starbucks in October.
Citigroup: Neutral, lowered price target $104 to $100.
UBS; Neutral, lowered price target $110 to $100.
Deutsche Bank: Buy, $118.
Barclays: Overweight, lowered price target $123 to $116.
Key Items To Watch: With this being Starbucks’ fourth-quarter earnings report, all eyes could be on guidance for the next fiscal year.
Investors will also want to hear commentary from the company's new CEO Laxman Narasimhan, who took over the role from Howard Schultz earlier this year.
Schultz announced a reinvention plan for Starbucks in 2022, and investors will want to hear whether this is still on track. The focus areas the company announced included same-store sales growth, margin improvements and earnings per share growth.
An update on the company's potential store count for the United States is also highly anticipated by some analysts and investors.
Another key topic is the company's China business, which has been seen as a weakness in recent years. China remains the second-largest market for Starbucks and is among the potential reasons for the share decline in 2023.
With many food and beverage stocks getting hit on concerns over lower demand due to weight loss drugs, Starbucks could also find itself answering questions about their impact.
SBUX Price Action: Starbucks shares are trading at $91.43 Wednesday versus a 52-week trading range of $82.97 to $115.48. Shares of Starbucks are down 10% year-to-date in 2023.
Read Next: Starbucks Q3 Earnings Highlights: Revenue Beats Estimates And Hits Record, China Sales Bounce Back
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Latest Ratings for SBUX
| Feb 2022 | Deutsche Bank | Maintains | Buy | |
| Feb 2022 | MKM Partners | Maintains | Buy | |
| Feb 2022 | Credit Suisse | Maintains | Outperform |
View the Latest Analyst Ratings
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