We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Coca-Cola & McDonald's Looked Strong, Is Starbucks (SBUX) Next?
Read MoreHide Full Article
Shares of Coca-Cola (KO - Free Report) climbed Tuesday after the firm posted better-than-projected third-quarter financial results. Coca-Cola’s strong performance followed fellow giant McDonald's (MCD - Free Report) impressive Q3 earnings results last week. Now, with its shares up over 11% in the last three months, let’s see what’s in the cards for Starbucks’ (SBUX - Free Report) Q4 results Thursday.
Coca-Cola & McDonald's Overview
McDonald's saw its adjusted quarterly earnings jump 19% to reach $2.10 per share, which surpassed our Zacks Consensus Estimate of $1.98 per share. Investors were likely pleased to see McDonald's global comparable sales pop 4.2%. U.S. comps rose 2.4% in Q3.
The fast-food giant also lifted its quarterly dividend by 15% to $1.16 per share, which will take effect starting in the fourth quarter. “In addition to achieving 13 consecutive quarters of positive global comparable sales, we have made substantial progress modernising restaurants around the world, enhancing hospitality and elevating the experience for the millions of customers we serve every day,” McDonald's CEO Steve Easterbrook said in a company statement.
Moving on, Coca-Cola’s adjusted third-quarter earnings jumped 14% to $0.58 per share. This topped our $0.55 per share estimate. Plus, the company’s global soda volume grew by 2% from the same quarter a year ago, driven by demand for Diet Coke and Coke Zero Sugar. Meanwhile, organic revenue, which excluded acquisitions, divestitures, and currency fluctuations, increased 6% from a year ago.
Shares of KO climbed 2.5% during regular trading Tuesday following its pre-market earnings release to inch close to its 52-week high.
Starbucks Overview
As we touched on at the top, SBUX stock has surged over 11% in the past three months as investors start to see some positive signs for the future of the once massive growth company that has moved sideways for much of the last three years. Starbucks’ days of impressive year-over-year growth are likely over, so the firm has turned to new initiatives to drive forward.
Starbucks has commitment to eco-friendly stores, which seems like a solid long-term play that likely fits well with its consumer base. Investors should also note that the coffee chain is committed to Chinese expansion. This includes a partnership with Chinese e-commerce giant and Amazon (AMZN - Free Report) rival Alibaba (BABA - Free Report) to help boost its sales and standing in the world’s second-largest economy.
Starbucks has said it plans to add 600 new stores per year in Mainland China through 2022 to double its locations to 6,000 total stores in 230 cities. The company has also focused on its digital and mobile payment offerings and opened new Starbucks roastery locations.
More Fundamentals
Shares of SBUX are have soared over 790% in the last 10 years. With that said, Starbucks stock is up only 44% in the past five years and down roughly 6% over the last three years.
We can also see that Starbucks stock is currently trading near its five-year low in terms of forward P/E. SBUX is currently trading at 22X forward 12-month Zacks Consensus EPS estimates. Starbucks rival Dunkin' is currently trading at 24X.
The coffee power’s stock has also traded as high as 36.2X over the last five years a with a five-year median of 25.5X Therefore, investors should be able to say that Starbucks stock is hardly expensive at the moment.
Q4 Outlook
Starbucks has already reported top-line growth in the first, second, and third quarter of fiscal 2018. Our current Zacks Consensus Estimate is calling for the firm’s Q4 revenues to climb by 8.8% to hit $6.20 billion.
At the other end of the income statement, SBUX is projected to see its adjusted quarterly earnings pop by 7.3% to reach $0.59 per share. Meanwhile, its full-year EPS figure is expected to expand by 16.5% to reach $2.40 per share.
Bottom Line
Starbucks is currently a Zacks Rank #3 (Hold) and sports a “B” grade for Value in our Style Scores system. With that said, the company’s earnings revision activity has been mixed recently and the company has only topped quarterly earnings estimates twice in the last 10 quarters. Starbucks’ earnings have come in right at our estimates in the other eight periods.
Starbucks is scheduled to release its fourth quarter and fiscal 2018 financial results after the market closes on Thursday, November 1.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Coca-Cola & McDonald's Looked Strong, Is Starbucks (SBUX) Next?
Shares of Coca-Cola (KO - Free Report) climbed Tuesday after the firm posted better-than-projected third-quarter financial results. Coca-Cola’s strong performance followed fellow giant McDonald's (MCD - Free Report) impressive Q3 earnings results last week. Now, with its shares up over 11% in the last three months, let’s see what’s in the cards for Starbucks’ (SBUX - Free Report) Q4 results Thursday.
Coca-Cola & McDonald's Overview
McDonald's saw its adjusted quarterly earnings jump 19% to reach $2.10 per share, which surpassed our Zacks Consensus Estimate of $1.98 per share. Investors were likely pleased to see McDonald's global comparable sales pop 4.2%. U.S. comps rose 2.4% in Q3.
The fast-food giant also lifted its quarterly dividend by 15% to $1.16 per share, which will take effect starting in the fourth quarter. “In addition to achieving 13 consecutive quarters of positive global comparable sales, we have made substantial progress modernising restaurants around the world, enhancing hospitality and elevating the experience for the millions of customers we serve every day,” McDonald's CEO Steve Easterbrook said in a company statement.
Moving on, Coca-Cola’s adjusted third-quarter earnings jumped 14% to $0.58 per share. This topped our $0.55 per share estimate. Plus, the company’s global soda volume grew by 2% from the same quarter a year ago, driven by demand for Diet Coke and Coke Zero Sugar. Meanwhile, organic revenue, which excluded acquisitions, divestitures, and currency fluctuations, increased 6% from a year ago.
Shares of KO climbed 2.5% during regular trading Tuesday following its pre-market earnings release to inch close to its 52-week high.
Starbucks Overview
As we touched on at the top, SBUX stock has surged over 11% in the past three months as investors start to see some positive signs for the future of the once massive growth company that has moved sideways for much of the last three years. Starbucks’ days of impressive year-over-year growth are likely over, so the firm has turned to new initiatives to drive forward.
Starbucks has commitment to eco-friendly stores, which seems like a solid long-term play that likely fits well with its consumer base. Investors should also note that the coffee chain is committed to Chinese expansion. This includes a partnership with Chinese e-commerce giant and Amazon (AMZN - Free Report) rival Alibaba (BABA - Free Report) to help boost its sales and standing in the world’s second-largest economy.
Starbucks has said it plans to add 600 new stores per year in Mainland China through 2022 to double its locations to 6,000 total stores in 230 cities. The company has also focused on its digital and mobile payment offerings and opened new Starbucks roastery locations.
More Fundamentals
Shares of SBUX are have soared over 790% in the last 10 years. With that said, Starbucks stock is up only 44% in the past five years and down roughly 6% over the last three years.
We can also see that Starbucks stock is currently trading near its five-year low in terms of forward P/E. SBUX is currently trading at 22X forward 12-month Zacks Consensus EPS estimates. Starbucks rival Dunkin' is currently trading at 24X.
The coffee power’s stock has also traded as high as 36.2X over the last five years a with a five-year median of 25.5X Therefore, investors should be able to say that Starbucks stock is hardly expensive at the moment.
Q4 Outlook
Starbucks has already reported top-line growth in the first, second, and third quarter of fiscal 2018. Our current Zacks Consensus Estimate is calling for the firm’s Q4 revenues to climb by 8.8% to hit $6.20 billion.
At the other end of the income statement, SBUX is projected to see its adjusted quarterly earnings pop by 7.3% to reach $0.59 per share. Meanwhile, its full-year EPS figure is expected to expand by 16.5% to reach $2.40 per share.
Bottom Line
Starbucks is currently a Zacks Rank #3 (Hold) and sports a “B” grade for Value in our Style Scores system. With that said, the company’s earnings revision activity has been mixed recently and the company has only topped quarterly earnings estimates twice in the last 10 quarters. Starbucks’ earnings have come in right at our estimates in the other eight periods.
Starbucks is scheduled to release its fourth quarter and fiscal 2018 financial results after the market closes on Thursday, November 1.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>