Trump's Energy Agenda, Skyrocketing Coffee Prices, Davos Highlights, And Powell's Wait-And-See Approach: This Week In Economics
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 26 2025
0mins
Should l Buy SBUX?
Source: Benzinga
Trump's Energy Policies: President Trump has declared a national energy emergency, emphasizing fossil fuel production and plans to revoke the electric vehicle mandate, which may significantly impact companies like Baker Hughes and Gulfport Energy.
Market Reactions: Netflix has raised its streaming prices by 16% amid inflation concerns, while soaring coffee prices could squeeze Starbucks' margins, and Jerome Powell indicates that interest rates will likely remain unchanged for now.
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Analyst Views on SBUX
Wall Street analysts forecast SBUX stock price to fall
21 Analyst Rating
12 Buy
7 Hold
2 Sell
Moderate Buy
Current: 106.440
Low
59.00
Averages
96.12
High
115.00
Current: 106.440
Low
59.00
Averages
96.12
High
115.00
About SBUX
Starbucks Corporations is a roaster, marketer, and retailer of specialty coffee globally. Its North America segment includes the United States and Canada. Its International segment includes China, Japan, Asia Pacific, Europe, Middle East and Africa, Latin America, and the Caribbean. Its North America and International segments include both Company-operated and licensed stores. The Channel Development segment includes roasted whole bean and ground coffees, Starbucks-branded single-serve products, a variety of ready-to-drink beverages, such as Frappuccino and Starbucks Doubleshot, foodservice products, and other branded products sold outside the Company-operated and licensed stores. A large portion of its Channel Development business operates under a licensed model of the Global Coffee Alliance with Nestle, while its global ready-to-drink businesses operate under collaborative relationships with PepsiCo, Inc., Tingyi-Ashi Beverages Holding Co., Ltd., Arla Foods amba, Nestle, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Expansion Plans: McDonald's aims to open 10,000 stores in mainland China by 2028, significantly increasing from over 7,700 at the end of 2025, demonstrating confidence in its growth amid fierce competition.
- Sales Growth Performance: The company reported a 3.4% increase in same-store sales in China during the first quarter, indicating strong performance driven by the Chinese market within its international developmental licensed markets segment.
- Emotional Brand Connection: The reintroduction of McDonald's classic strawberry and vanilla milkshakes has sparked nostalgia among consumers, particularly those who first experienced Western fast food in the 1990s, further solidifying the brand's influence among younger consumers.
- Value Proposition Advantage: The
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- Significant Revenue Growth: In the second quarter of fiscal 2026, Starbucks reported a 9% year-over-year revenue increase, a 6.2% rise in comparable sales, and a 32% increase in earnings per share to $0.45, indicating a robust recovery that boosts investor confidence.
- Strong U.S. Market Performance: U.S. comparable sales rose 7.1%, driven by a 4.4% increase in transactions and a 2.6% rise in average ticket size, suggesting that growth is primarily due to increased customer engagement rather than just price hikes, reflecting a resurgence in the company's competitive position.
- Delivery Service Expansion: Starbucks' delivery service saw a 30% year-to-date increase, catering to consumer demand, while cold drink sales performed well, with new energy refreshers and mango flavors exceeding expectations, and cold foam sales rising 40% in the U.S.
- Completion of China Business Sale: Starbucks finalized the sale of its China business to a local partner, maintaining its status as the
See More
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- Starbucks Sales Weakness: Starbucks (SBUX) has experienced declining same-store sales over the past two years, with projected sales expected to drop by 2.9% in the next 12 months, indicating a need for adjustments in pricing and marketing strategies to stimulate demand, potentially impacting market share.
- General Dynamics Growth Challenges: General Dynamics (GD) has seen only a 6.9% annual revenue growth over the past five years, which is below other industrial companies, and an estimated sales growth of 4% for the next 12 months suggests a slowdown in demand that could affect its competitiveness and investment appeal.
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- Challenging Market Environment: Large-cap stocks are facing growth challenges, prompting investors to be cautious, particularly with companies like Starbucks, General Dynamics, and Viking, which may require a reassessment of their portfolios to navigate future uncertainties.
See More
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- S&P 500 Inclusion: Casey's General Stores (CASY) officially joined the S&P 500 on April 9, replacing Hologic (HOLX), which is expected to enhance its market visibility and drive stock price appreciation, evidenced by a 7% increase in the past week.
- Strong Financial Performance: In the latest quarter, Casey's reported diluted EPS of $3.49, nearly a 50% year-over-year increase, and EBITDA of $309 million, up 27.5%, showcasing robust revenue growth amid rising gas prices.
- Zoom's Investment Value: Zoom Communications (ZM) invested $51 million in Anthropic in May 2023, with analysts estimating the stake's current value between $2 billion and $4 billion, as Anthropic approaches a valuation of $900 billion, significantly enhancing Zoom's market potential.
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See More
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Sector Performance: Technology and healthcare sectors have outperformed others, driven by strong earnings reports and positive outlooks.
Economic Indicators: Recent economic data suggests a steady recovery, with improvements in employment rates and consumer spending.
Investor Sentiment: Overall investor sentiment remains bullish, with many looking for opportunities in undervalued stocks amidst market fluctuations.
See More
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- Sales Growth Slowdown: Several U.S. restaurant chains, including Wingstop and Domino's, reported weaker-than-expected sales growth in the latest quarter, primarily due to soaring gasoline prices caused by the U.S.-Israeli war, forcing consumers to cut back on other spending, with expectations that other chains will face similar challenges ahead.
- Significant Oil Price Impact: According to GasBuddy.com, the average gasoline price in the U.S. has reached $4.43, a nearly 40% increase from last year, with prices in California exceeding $6, presenting unprecedented challenges for the restaurant industry, as evidenced by Wingstop's 8.7% decline in same-store sales.
- Diminished Market Confidence: Since the onset of the war, the LSEG U.S. restaurant index has dropped by 5%, erasing over $40 billion in market value, reflecting a decline in investor confidence in the sector, with a notable increase in analysts downgrading profit forecasts for the upcoming quarter.
- Changing Consumer Behavior: As gasoline prices rise, restaurant visitations are gradually declining, with analysis predicting that at $4.20 per gallon, visits could decrease by approximately 1.5%, and if prices exceed $5.10, fast-food traffic may drop by 3%, indicating a long-term impact on the restaurant industry.
See More
