Can Starbucks (SBUX) Stock Continue Hitting New Highs?

What's Happening With SBUX View more about SBUX >

Coffee chain Starbucks (SBUX) continues to drive higher, with shares currently sitting just shy of their all-time high. The stock has trended steadily higher over the last 12 months, and will look to build on its gains ahead of its next earnings report on July 25.

Technical Analysis

SBUX was recently trading at $87.69 down $0.12 from its 12-month high and $39.29 above its 12-month low. InvestorsObserver’s Stock Score Report gives SBUX a 95 long-term technical score and a 94 short-term technical score. The stock has recent support above $82.5 and recent resistance below $87.5. Of the 23 analysts who cover the stock 11 rate it Strong Buy, 0 rate it Buy, 12 rate it Hold, 0 rate it Sell, and 0 rate it Strong Sell, SBUX gets a score of 75 from InvestorsObserver’s Stock Score Report.

Analysts' Thoughts

SBUX stock has trended steadily higher over the last year, and the stock is currently trading just pennies below its all-time high as we head into the second half of the year. The stock’s gains have been fueled by four straight earnings beats, while sales fell just shy of the consensus last quarter. Starbucks continues to be a strong growth story, with profits up 15.3% per annum over the last five years, and analysts forecast annual earnings growth of 13.1% for the next five years. Such strong growth will continue to push the stock higher as long as the company continues to deliver in-line or better than expected quarterly numbers. The stock has a slightly high valuation, with shares trading at 28 times future earnings, but Wall Street remains bullish on the company, its management, and its ability to grow profits. If traders continue to see earnings growth, the stock should extend its gains and move higher through the latter part of the year. Analysts have an average price target of $78.37 on the stock.

About Starbucks Corporation

Through a global chain of almost 30,200 company-owned and licensed stores, Starbucks sells coffee, espresso, teas, cold blended beverages, food, and accessories. The company also distributes packaged and single-serve coffee, tea, juice, and pastries through its own stores, grocery store chains, and warehouse clubs under the Starbucks and Teavana brands under the Global Coffee Alliance partnership with Nestle. In addition, Starbucks markets bottled beverages, ice creams, and liqueurs through various partnerships with Pepsi, Anheuser-Busch, Tingyi, and Arla. In fiscal 2018, the Americas segment (including the U.S.) represented 68% of total revenue, followed by the China-Asia Pacific segment (18%), channel development (9%), Europe-Middle East-Africa (4%), and corporate-other (1%).

Already a member?

Login to see your Stocks to Watch Trade Ideas.

Not yet a member?

Receive a Morning Action trade idea every market day in the Morning Update, plus Stocks to Watch Trade Ideas every Saturday.

Become A Member