Stock on Focus: Starbucks Corporation (SBUX)

Company Profile:

Starbucks Corporation, together with its subsidiaries, operates as a roaster, marketer, and retailer of specialty coffee worldwide. The company operates in four segments: Americas; China/Asia Pacific; Europe, Middle East, and Africa; and Channel Development. Its stores offer coffee and tea beverages, packaged roasted whole bean and ground coffees, single-serve and ready-to-drink coffee and tea products, juices, and bottled water; an assortment of fresh food and snack offerings; and various food products, such as pastries, breakfast sandwiches, and lunch items, as well as beverage-making equipment and accessories. The company also licenses its trademarks through licensed stores, and grocery and national foodservice accounts. It offers its products under the Starbucks, Teavana, Tazo, Seattles Best Coffee, Evolution Fresh, La Boulange, Ethos, Frappuccino, Starbucks Doubleshot, Starbucks Refreshers, and Starbucks VIA brand names. As of November 3, 2016, the company operated 25,085 stores. Starbucks Corporation was founded in 1971 and is based in Seattle, Washington.

Recent News:

On Sep. 28, 2017, the company announced it has entered into an agreement with its long-time strategic partner Maxim’s Caterers Limited – a leading restaurant operator of multiple brands across Asia – to fully license Starbucks operations in Singapore.

For three months ended July 02, 2017, Starbucks’ revenue increased 8% on a y-o-y basis to $5.66 billion from $5.24 billion in Q3 FY16. Its global comparable store sales increased 4% compared to 3% increase in Q2 FY17.

On July 17, 2017, Starbucks’ Board of Directors declared a cash dividend of $0.25 per share, payable on August 25, 2017, to shareholders of record as of August 10, 2017.

 

Fundamental Analysis:

Ninestocks analyzes several different financial aspects: Growth, Profitability, solvency and efficiency.

Growth – Measures the growth of both the company’s income statement and cash flow.

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Profitability – Measures the historical price movement of the stock.

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Solvency – Measures the solvency of the company based on several ratios.

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Efficiency – Measures the strength and historic growth of a company’s return on invested capital.

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Conclusion:

SBUX’s strengths can be seen in its strong growth, strong profitability, robust solvency and better efficiency compared with its peers. Its revenue and net income have increased over several years. Technical indicators signal the bullish signs, as there is a bullish cross in MACD and Stochastic Oscillator, RSI (14) stands at 56.87 with positive bias. We rate Starbucks Corporation (SBUX) a STRONG BUY.

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