Starbucks Corp. (NASDAQ: SBUX)
Shares of Starbucks Corp. (SBUX) took a dip in the after market session Thursday despite beating earnings estimates with 46 cents per share on $5.37 billion in revenues compared to 45 cents per share on $5.39 billion in revenue estimated by Wall Street. The trendy coffee maker’s estimated 38-39 cents per share for Q2 while analysts were looking at the 40 cents per share range. However, SBUX did still increase comparable sales growth to the tune of 9% in the United States and 8% globally. Even though they announced a softer than expected outlook, I still think SBUX will stay very popular for the near future so I’m not too incredibly worried about it. Shares dipped roughly 3% in the aftermarket session on heavy volume.
“Starbucks record Q1 2016 financial and operating results, highlighted by comp sales increases of 9% in the U.S., 8% globally, another 4% increase in global traffic – and record performance from our Channel Development segment – underscore the accelerating strength and relevance of the Starbucks brand around the world,” said Howard Schultz, Starbucks Chairman and CEO. “Successful retail, CPG, digital, mobile, loyalty, card and investment strategies are combining to accelerate our revenue growth and drive significant margin expansion and EPS leverage.” (Zacks)
Starbucks closed the trading day at $59.03 on above average volume but after earnings were released shares slipped down to $56 per share on heavy after-market volume. Shares are looking to gap down near the 200-day moving average that is currently sitting at $56.23. It will be interesting to see how traders react to this important level and whether it will trade through it or act as a big support level. Either way, this stock will be in play tomorrow and we should see some active trading in it. With the market being as weak as it has been in 2016, I’d expect SBUX to be under fire tomorrow.
SBUX shares have been on a nice trend dating back to 2014 with a couple days trading at or below the 200-day moving average. This could be the beginning of the trend break up as shares have stalled out in the low $60 price range but we’ll have to wait and see how the price action pans out over the next few weeks. We should see some solid support at the $56.23 and $55 price levels with resistance coming in at $$56.75 and $57.67. Currently analysts have an average price target of $67.97.
Starbucks Corp. engages in the manufacture and sale of coffee and tea. The firm operates through the following segments: Americas; Europe, Middle East, and Africa; China/Asia Pacific; Channel Development; and Other. Its brand portfolio includes Starbucks Coffee, Seattle’s Best Coffee, Tazo Tea, Evolution Fresh, La Boulange, and Torrefazione Italia Coffee. The company was founded in 1971 and is headquartered in Seattle, WA. (MarketWatch)