Starbucks (NASDAQ) is a Seattle coffee giant that rose to prominence in 1990s. It saw a 11% drop in revenues in 2020 due to the COVID crisis. 

SBUX stock is showing impressive momentum now that the economy has recovered. The stock continues to rebound this year and has shown remarkable stability, at a moment when other stocks swing wildly.

These are the obvious reasons. It has now reopened nearly all of its coffee shops. Starbucks still has a lot to do in response to the pandemic. Investors and growth analysts expect more. Starbucks’ sales have risen to levels that are higher than those before the global epidemic. 

Starbucks will benefit as consumers continue to gravitate towards their favourite brands. We’ll dive in to why I believe this stock is a good investment and what investors should do to make Starbucks stocks more attractive. (See Starbucks stock charts on TipRanks)

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The Pandemic Can’t Touch Coffee!

The company’s resilience throughout the entire pandemic has been something we have all witnessed. People like caffeine, regardless of whether there is a pandemic.

Starbucks recently released earnings results that reflect this fact. Starbucks’ most recent quarter saw revenue surpass $7.5 billion. Although this is an incredible number in absolute terms it was also a significant increase of 78% over the previous year.

According to the company customer mobility can boost sales. It is possible that the economy will reopen and this could lead to increased growth. Human reconnection is what we all desire. Starbucks provides that “third space,” or some other place for people to relax, as consumers need it.

There are still concerns about how strong this recovery will turn out to be. There have been an increase in cases due to variants across the country. A lot of workers continue to work remotely and have given up their morning coffee in favor of working at home. This continues to reduce sales, despite the fact that they may have been higher.

However, the drive-thru and mobile ordering options as well to-go orders are strong. They are likely to compensate for any declines in restaurant revenues.

Statistics is the Key

Starbucks is not the only business that has been affected by the pandemic. The company posted an earnings beat in September 2020 with a EPS of $0.79. Starbucks had cashflow of $1.6billion in operating activities. The company saw its total revenue fall to $23.5 million.

According to experts, Starbucks’ revenue will grow by 21% as the economy improves and it is expected that Starbucks’ FY2021 revenues will reach $28.5 million. Starbucks’ earnings per share are expected to reach $3.17. Experts predict that Starbucks’ net income in 2021 will reach $3.7 Billion. This is a positive sign that SBUX stock will continue to enjoy a slow and steady recovery. 

What are Analysts Saying about SBUX Stock

As per TipRanks’ analyst rating consensus, SBUX is a Moderate Buy. Twelve Buy recommendations are included in the 18-rated analyst rating, while six Hold recommendations are available. 

This stock has an average Starbucks price target of $130.33, implying an upside of 17.18%. The analyst price targets vary from $145 to $105 per shares, depending on the analysts. 

Bottom line

Starbucks is an international brand that has a solid presence. Notable is Starbucks’ position in global coffee markets, estimated to rise to more than $465 billion by 2026.

Picking the company that is the most dominant in a sector will work for you long-term. Starbucks stock is worth looking at right now.

Disclosure: Chris MacDonald had no position at the time this article was published.

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