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 over the next 12 months. According to Wall Street analysts, the average 1-year price target for SBUX is 96.12 USD with a low forecast of 59.00 USD and a high forecast of 115.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
21 Analyst Rating
12 Buy
7 Hold
2 Sell
Moderate Buy
Current: 99.120
Low
59.00
Averages
96.12
High
115.00
Current: 99.120
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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- Optimistic Future Outlook: Adyen forecasts revenue growth of 20-22% for 2026 and expects EBITDA margin to exceed 55% by 2028, indicating strong confidence in its growth potential moving forward.
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- Payout Ratio Warning: Starbucks' payout ratio has soared above 200%, indicating that the company is spending more than twice its net income on dividends, which raises concerns about its financial stability.
- Cash Flow Decline: The company's cash flow from operations has plummeted from $5.6 billion last year to $4.3 billion, highlighting increased pressure on sustaining dividends, compounded by the lack of share repurchases that dilute shareholder value.
- Investor Risk Advisory: Given the slowdown in dividend growth and deteriorating financial metrics, Starbucks' stock may face short-term pressure, suggesting that income-focused investors should consider avoiding this stock.
See More
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- Dividend Growth Trend: Starbucks' dividend grew at an average annual rate of 24.5% over the past decade, but has slowed dramatically since 2021, with only a 1.6% increase in 2022, indicating troubling fundamentals that may lead to a halt in future dividend growth.
- Payout Ratio Warning: The company's payout ratio has exceeded 200%, meaning it spends more than twice its net income on dividends, which is a significant warning sign regarding the sustainability of its dividend payments.
- Declining Cash Flow: Starbucks' cash flow from operations has dropped from approximately $5.6 billion a year ago to just under $4.3 billion today, highlighting a reduction in available cash after dividend payments, raising further concerns about dividend sustainability.
- Suspended Buyback Program: Starbucks has not repurchased shares since 2024, and the expansion of its employee stock investment plan is diluting shares, which could negatively impact stock prices in the short term, prompting investors to carefully consider the stock's investment potential.
See More
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- Profitability Improvement: Luckin has been profitable for the last six quarters, with expected net profit growth of at least 20% annually, while Starbucks has seen a slowdown in profit growth, showcasing Luckin's competitive edge.
- Retail Sentiment Shift: According to Stocktwits data, retail sentiment on Luckin surged from 'bullish' to 'extremely bullish', while Starbucks is in 'bearish' territory, indicating a significant increase in investor confidence in Luckin.
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