Trading Starbucks After Fiscal Q4 Performance

November 08, 2023 03:40

Consumer discretionary stocks such as Starbucks are often used as an indicator of the health of the US economy. When the economy is healthy with low unemployment, consumers tend to spend more on discretionary items such as coffee. When economic times are tough, consumers tend to hold back on such purchases. 

Learn more about Starbucks' fiscal fourth-quarter performance, what the management team say about the economy and what analysts are forecasting for the stock.

Stock: Starbucks Inc
Symbol for Invest.MT5 Account: SBUX
Date of Idea: 7 November 2023
Time Line: 1 - 6 months
Entry Level: $104.00
Target Level: $125.00
Position Size for Invest.MT5 Account: Max 5%
Risk: High
  • The Invest.MT5 account allows you to buy real stocks and shares from 15 of the largest stock exchanges in the world.

All trading is high risk and you can lose more than you risk on a trade. Never invest more than you can afford to lose, as some trades will lose and some trades will win. Start small to understand your own risk tolerance levels or practice on a demo account first to build your knowledge before investing. 

Starbucks Fiscal Q4 2023 Performance

Here are some of the key highlights from the latest fiscal fourth-quarter earnings report from Starbucks: 

  • Earnings per share of $1.06 vs 97 cents expected 
  • Revenue of $9.37 billion vs $9.29 billion expected 
  • Quarterly net income of $1.22 billion, up from $878.3 million a year earlier 
  • Net sales up 11.4% to $9.37 billion 
  • Same-store sales up 8% vs 6.8% expected 

Starbucks beat analyst expectations on most metrics with earnings, revenue, sales and consumer traffic increasing. The management team highlighted that most of the growth in sales came from higher footfall in its stores.  

In Starbucks' second-largest market, China, customer traffic increased 8% but the average price of an order fell 3%. This is a stark contrast from this time last year in which sales in China fell more than 16% due to Chinese Covid restrictions.  

CEO Laxman Narasimhan attributed much of Starbucks' success to a new plan that improved working conditions by improving pay and work hours and replacing old equipment. The plan was to "reinvigorate the partner culture at Starbucks." 

However, while Narasimhan's plan to invest in productivity has started to pay off, much of this may now already be priced into the stock price. The issue now is whether or not customer traffic will continue to increase as we move into the holiday season and people focus on gifts rather than personal discretionary items.  

There may also be further pain headed for the consumer that will affect Starbucks' revenue. The Federal Reserve has already stated that while interest rates may currently be on hold, there is still scope to increase them in the future. Higher borrowing costs hit consumers hard and the first things to cut back on are items such as coffee.  

Therefore, it's important to keep abreast of the macroeconomic situation and central bank policy as these have a big impact on consumer behaviour.

Starbucks Stock Forecast - What do the Analysts Say?

According to analysts polled by TipRanks for a Starbucks stock forecast in the past 3 months, there are currently 7 buy, 12 hold and 0 sell ratings on the stock. The highest price level for a Starbucks stock forecast is $125.00 with the lowest price target at $98.00. 

The average price target for a Starbucks stock forecast is $111.33.

Source: TipRanks, 7 November 2023


An Example Trading Idea for the Starbucks Stock Price

An example trading idea for the Starbucks share price could be as follows:  

  • Buy the stock on a break above the post-earnings high at $104.00 to allow for volatility. 
  • Target just below the highest analyst price target of $125.00. 
  • Keep your risk small at a maximum of 5% of your total account.   
  • Time Line = 1 – 6 months  
  • If you buy 10 Starbucks shares:  
    • If target is reached = $210.00 potential profit [($125.00 - $104.00) * 10 shares].

Remember that markets go up and down and it is unlikely the share price will move up in a straight line. In fact, it may even go much further down before it rises, especially considering how sensitive Starbucks' share price is to changing consumer behaviour.

Be sure to exercise good risk management and always know how much you could potentially lose on a trade and the risks involved, as well as the costs.

With the Admirals Invest.MT5 account you can buy and sell US stocks with a commission from $0.02 per share. Buying 10 shares in Starbucks stock would result in a commission of $0.20 ($0.02 * 10 shares) for executing a per-side transaction.

There is a low minimum transaction fee of $1. So, the example trading idea above would result in a commission of just $1 overall! 

How to Buy Starbucks Stock in 4 Steps  

With Admirals, you can buy shares in companies like Starbucks with a low commission of just $0.02 per share and a low minimum commission of just $1 on US stocks. 

  1. Open an account with Admirals to access the dashboard.   
  2. Click on Trade on one of your live or demo accounts to open the web platform.   
  3. Search for your stock in the search window at the top right to view the live price chart. 
  4. Click Create New Order from the bottom of the screen to open the trading ticket. 
Source: Admirals MetaTrader 5. Starbucks. Monthly. Date: Jan 2018 to Nov 2023, captured on 7 Nov 2023. Past performance is not a reliable indicator of future results or future performance.


Click on the banner below to trade Starbucks stock today! ▼▼▼ 

Do You See the Starbucks Stock Price Moving Differently?   

Remember that all analytics and trading ideas are based on the personal view and experience of the author.

If you believe there is a higher chance Starbucks share price will move lower, then you can also trade short from a CFD (Contracts for Difference) trading account which Admirals also provide.

The Trade.MT5 and Trade.MT4 account allows you to speculate on the price direction of stocks and shares using CFDs.

This means you can trade long and short to potentially profit from rising and falling stock prices.


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Jitanchandra Solanki
Jitanchandra Solanki Financial Markets Author, Admirals London

Jitanchandra is a financial markets author with more than 15 years experience trading currencies, indices and US equities. He is an accredited Market Technician with a BA Hons degree.