Stock Groups

Can Starbucks Stock Heat up Again? By TipRanks


© Reuters. Is Starbucks stock on the rise?

Starbucks stock (NASDAQ 🙂 has seen significant pressure in recent months.

Yum China (YUMC), in an update, said that profits could fall as much as 50% to 60% due to new COVID-19 Delta variant worries. The news sent YUMC stock plummeting nearly 6%.

China, the major market for Starbucks’ Seattle-based coffee company, has undoubtedly been an important source of growth.

Despite the headwinds of COVID-19, Starbucks is still strong and will heat up once it has passed through another round.

In light of Starbucks’s momentum, which was before the poor news, and because the Delta-induced effect is likely to be baked into the share price now, I believe that SBUX stock should remain bullish. However, shares may experience a correction. (See SBUX stock charts on TipRanks)

Longer-Term Fundamentals

The latest update from Yum China doesn’t bode well for Starbucks, as it looks to cap off the year.

The long-term China thesis remains unaffected. Starbucks will continue to enjoy the benefits of China’s rising middle class for years to come.

It’s a secular tailwind and will continue to develop over many years. Short-term headwinds should not be an issue.

Wall Street’s Take

According to TipRanks’ consensus analyst rating, SBUX stock comes in as a Moderate Buy. There are twelve Buy recommendations and five Hold recommendations among the 17 analyst ratings.

The average SBUX price target is $132.14. The price targets of analysts range from $108 to $145 per shares.

Bottom Line

A majority of analysts remain bullish on SBUX stock. Analysts will now consider a slowdown in China. This may change.

In the weeks ahead, some analysts will follow the lead of YUMC’s analysts and downgrade Buy ratings or price targets.

These downgrades can further pressurize the stock and offer a tempting entry point to long-term investors who are looking for longer-term benefits.

Disclosure: Joey Frenette held shares in Starbucks at the time this article was published.

Disclaimer: Information in this article does not necessarily reflect those of TipRanks. TipRanks cannot guarantee the reliability, completeness or accuracy of any information. The article does not constitute a solicitation or recommendation to buy or sell securities. The article does not provide legal, financial, investment, or professional advice. It also doesn’t take into consideration the individual needs or requirements. Neither is the information contained in it a complete or comprehensive statement about the subject or issues discussed. TipRanks or its affiliates are not responsible for the contents of this article. Any action you take based on the information is your responsibility. TipRanks’ or any affiliates does not endorse this link. Performance in the past is no indication of future performance, prices, or results.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. CFDs are stocks, indexes or futures. The prices of Forex and CFDs are not supplied by exchanges. Instead, they are determined by marketmakers. As such, the prices might not reflect market conditions and could be incorrect. Fusion Media is not responsible for trading losses that may be incurred as a consequence of the use of this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. You should be aware of all the potential risks and expenses associated with trading in the financial market. It is among the most dangerous investment types.



Mike Robinson
Mike covers the financial, utilities and biotechnology sectors for Street Register. He has been writing about investment and personal finance topics for almost 12 years. Mike has an MBA in Finance from Wake Forest University.