Home Investing Is Starbucks stock a ‘buy’ after better-than-expected Q3 earnings?

Is Starbucks stock a ‘buy’ after better-than-expected Q3 earnings?


Shares of Starbucks Corporation (NASDAQ: SBUX) are in the green this morning after the chain of coffeehouses reported better-than-expected profit for its fiscal third quarter in the face of a big hit to comparable sales in China.

Stephanie Link likes Starbucks stock

Versus the start of 2022, Starbucks stock is still down about 30% that, as per Hightower’s Stephanie Link, is an opportunity to buy a quality name at a deep discount. This morning on CNBC’s “Squawk Box”, she said:

Starbucks is a turnaround story. They have an analyst day in September, that’s your catalyst. And of course, Howard Schultz is back. So, I think Starbucks stock is very interesting, trades at the low end of its historical range. I like that one a lot.

Her constructive view is in line with Wall Street that currently has a consensus “overweight” rating on Starbucks stock. According to the multinational, same-store sales in China tanked 44% YoY on COVID restrictions. Link, however, drives her optimism from the strength in North America.

It was very encouraging to see the comps in North America at 9.0%. Ticket was up 8.0% so they’re getting price. China was down 44%, but that was the worst because they reopening now.

Starbucks Q3 earnings snapshot

Earned 84 cents a share (adjusted) down from 99 cents last yearNet sales climbed 9.0% on a year-over-year basis to $8.20 billionConsensus was 77 cents of adjusted EPS on $8.15 billion in salesGlobal comparable sales went up 3.0% versus 3.2% expected

Adjusted operating margin slipped from 20.4% to 16.9% Starbucks ended the quarter with 27.4 million (13% up) active “Rewards” members in the U.S., as per the earnings press release. It, however, terminated share buybacks and refrained from guiding for the fiscal fourth quarter.

The post Is Starbucks stock a ‘buy’ after better-than-expected Q3 earnings? appeared first on Invezz.

You may also like