|Bid||71.22 x 900|
|Ask||71.31 x 1400|
|Day's Range||70.76 - 71.39|
|52 Week Range||47.37 - 71.54|
|Beta (3Y Monthly)||0.41|
|PE Ratio (TTM)||31.75|
|Earnings Date||Apr 25, 2019|
|Forward Dividend & Yield||1.44 (2.03%)|
|1y Target Est||69.02|
Starbucks (SBUX) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.
Starbucks, Snap, Twitter and Kraft-Heinz all had important news Friday. Only one of those had good news.
Sales-driving efforts boost BJ's Restaurants' (BJRI) top line in the fourth quarter of 2018 while high restaurant operating margins drive earnings despite missing estimates.
While growth in adjusted EBITDA and lower tax rate favor Wendy's (WEN) fourth-quarter earnings, increase in franchise royalty revenues aids the top line.
For Nike (NYSE:NKE), the news all seems good at the moment. Not even hot NBA prospect Zion Williamson and his incredible exploding Nike shoes can really dent the stock. Even after the "backlash," Nike stock is just 2% shy of its all-time high reached in September. Analysts, too, have turned bullish on Nike, and a strong rally that began in December shows no signs of slowing.Source: Shutterstock Right now, it seems like the gains in Nike stock should continue. And perhaps they will. But I've been cautious on NKE stock despite the rally, and I remain so at $83.65.The news all seems good -- and maybe great -- at the moment. Still, there are risks that could trip Nike up as 2019 rolls on.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Risks to Nike Stock: ChinaChina has been a significant catalyst for Nike stock of late. Greater China, according to Nike filings, drove 15% of sales in the first half of fiscal 2019. But sales in the region rose 25% year-over-year in the first two quarters, contributing more than one-third of the company's total revenue growth. More importantly, per the 10-Q, China drove 81% of the total increase in earnings before interest and taxes (EBIT). * 7 Healthy Dividend Stocks to Buy for Extra Stability For major American brands, China has been a mixed bag of late. Starbucks (NASDAQ:SBUX) did see some deceleration in the market in its fiscal first quarter, but SBUX stock has rallied nicely. Apple (NASDAQ:AAPL) has seen significantly weaker sales and lower pricing in China, leading to pressure on its stock.Sales in China will be closely watched when Nike reports third-quarter earnings next month.If Nike can deliver, even in what looks like a weaker macro environment, the optimism toward China will only grow. If there's any sign of weakness, however, investors might start to wonder from else Nike can drive 20%-plus growth. The answer, at this point, is nowhere. Risks to Nike Stock: The Economy (and the Stock Market)A slowing Chinese economy raises a potential risk to Nike. But the same is true in many other markets. Nike's margins have improved of late as the company has been able to take pricing. Confident consumers are willing to pay full freight for in-demand products.In addition, increasing direct sales have allowed Nike to work around retailers like Foot Locker (NYSE:FL) and capture even more dollars. But even with both those benefits, earnings growth hasn't been that spectacular. In North America, for instance, first-half EBIT rose 10%.There are risks to Nike's growth both in North America and overseas. In the U.S., in particular, investors seem reasonably sanguine. But another panic could lead stocks lower. And the 20%-plus decline in Nike stock from early October to mid-December shows that market-wide pressure can have a big impact. Risks to Nike Stock: ValuationThe most pressing question at the moment is valuation. Nike stock trades at its highest multiples in years. NKE is valued at 32x FY19 consensus EPS and 27x fiscal 2020 estimates.This is a great company - and a stock worth paying up for. But at a certain point, valuation matters - and we're likely at that point. Nike's growth is expected to accelerate going forward - one reason the Street is behind the stock.NKE stock, however, is catching up to even those most bullish analysts. The average analyst target price is $87.33 - just 3% above the current levels. It now trades at a significant premium to rival Adidas AG (OTCMKTS:ADDYY), although a discount to Under Armour (NYSE:UA, NYSE:UAA).It will take a big Q3 report next month to push those analysts to update their models. And I can see why investors wouldn't want to bet against Nike posting that type of growth - particularly with the company's track record of topping expectations.Still, to get there, pretty much everything has to go right for Nike. Right now, everything is -- but if that changes, the trajectory of Nike stock could do the same.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Smart Money Stocks to Buy Now * The 10 Best Cheap Stocks to Buy Right Now * 7 Restaurant Stocks to Watch in 2019 Compare Brokers The post What Can Go Wrong for Nike Stock? appeared first on InvestorPlace.
I've been bearish on Starbucks (NASDAQ:SBUX) stock for some time now. That skepticism looked prescient a year ago, when SBUX stock touched its lowest levels in almost three years. Since then, however, Starbucks stock has soared: SBUX at the moment trades near its all-time high.Source: Shutterstock Despite the volatility of the stock, Starbucks' outlook doesn't seem to have changed all that much. Starbucks' business is up there with McDonald's (NYSE:MCD) as one of the best in the world.But the valuation of SBUX stock has been worrisome for a long time, and SBUX is facing meaningful risks. By placing a huge bet on China, SBUX has made a wager that looks increasingly dicey as the economy in that emerging market shows signs of slowing down. Meanwhile, the same-store sales and traffic growth of Starbucks' U.S. business has slowed.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Healthy Dividend Stocks to Buy for Extra Stability While SBUX stock has gained a whopping 50% from its late-June lows, its risks persist. In fact, several of those risks were highlighted in the company's first-quarter results last month that helped push Starbucks stock to its current highs. Given those concerns, and an increasingly stretched valuation, it looks like SBUX stock has run too far. Starbucks' Q1 EarningsLooking at the headline Q1 numbers, investors could easily believe that SBUX did well. Propelled by a 4% same-store sales increase, its revenue rose 9%. Adjusted earnings per share climbed 15% year-over-year. Both figures were nicely ahead of analysts' consensus outlook, and seem to foreshadow a potentially strong fiscal 2019.But the quarter isn't nearly as impressive as it seems on the surface. Comp growth of 4% seems impressive, but three of the four percentage points were generated by price hikes. In the U.S., traffic was flat year-over-year (as it was in the same period a year earlier), further suggesting that the business has reached a saturation point domestically. In China, comps rose just 1% year-over-year, while the number of transactions declined 2% YoY.Meanwhile, the company's earnings growth came almost solely from a lower tax rate. Adjusted operating income actually declined 1.2% YoY. Margins dropped 1.7 percentage points.Still, there are reasons to worry about the company's near-term profit outlook, even though its sales are growing. And some of the longer-term concerns raised by the company's Investor Day late last year haven't eased.SBUX stock now trades at almost 26 times the midpoint of its updated EPS guidance. That's a high valuation, and one that suggests that everything will keep going smoothly. Has SBUX Stock Peaked?From here, $71.54 looks like a potential peak for SBUX stock. The 26 multiple is towards the high end of the company's multi-year range. It's a multiple that likely requires the U.S. stock market and the company's overseas business to continue to be strong.Starbucks still is adding new stores in the U.S. But the pace is slowing; its domestic store count rose just 4% year-over-year last quarter. With nearly 15,000 stores, SBUX likely is running out of room.And its European business is improving, as a turnaround there takes hold. But the big growth driver of Starbucks stock is China.Luke Lango argued on this site that the struggles of Apple (NASDAQ:AAPL) in China raised some concerns about the country's economy, and he makes a good point. Clearly, Chinese customers are more budget-conscious than they were a year ago.Weakness in China won't bring Starbucks' growth story to an end. But it certainly would slow SBUX down and hurt SBUX stock. I noted in December that Starbucks already has brought down its long-term EPS growth target to roughly 10% per year from 12% previously. Unexpected troubles in China would drop that growth to the single-digits. And as embedded as Starbucks is in the U.S., in particular, it's tough to see investors paying 26 times earnings for 8%-9% annual EPS increases.The risk facing SBUX stock is not necessarily that Starbucks' growth is going to stop, but that it will slow enough to give investors pause. Currently, SBUX's FY20 EPS is on a pace to be about $3; cut that figure to $2.90 and bring the EPS multiple down to a still-reasonable 21 times, and SBUX stock would drop to $60. Add in any macro worries in the U.S. or Europe and the decline could be steeper. Be Careful With Starbucks StockAll told, it does look like SBUX is approaching a ceiling. It's difficult to imagine its earnings multiple expanding much more. SBUX may outperform expectations this year, but it's seemingly equally likely that it could stumble, particularly in Asia.SBUX stock shouldn't be shorted, by any means; it simply seems like there are better, and potentially easier, ways to make money. A few good quarters have sent Starbucks stock 50% higher. It would probably only take one bad quarter to reverse at least some of those gains.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Smart Money Stocks to Buy Now * The 10 Best Cheap Stocks to Buy Right Now * 7 Restaurant Stocks to Watch in 2019 Compare Brokers The post Starbucks Stock Is Simply Too Hot appeared first on InvestorPlace.
Despite missing estimates, Cheesecake Factory's (CAKE) sales-building initiatives as well as cost containment efforts aid earnings in the fourth quarter of 2018.
The stock market's recession fears are in the rearview mirror. Year-to-date, the S&P 500 is up 11%, and it's up nearly 20% from its Christmas Eve 2018 lows, as the big risks in late 2018 (stalling trade talks, a hawkish Federal Reserve and slowing economic growth) have all dramatically improved in early 2019.Restaurant stocks have been front-and-center of the bounce-back rally in stocks. That's because as big economic risks have faded, consumers have regained their strength, and the whole restaurant industry has benefited from higher traffic. Indeed, despite adverse weather conditions, comparable sales growth across the entire restaurant industry came in at a two-year high in the December/January period, according to TDn2K.Consequently, restaurant stocks have been in rally mode. Not all of them will remain so for the rest of 2019, however. Instead, as the year rolls on, industry-wide tailwinds will cool, and there will be a big divergence between winners and losers in this industry.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Smart Money Stocks to Buy Now With that in mind, let's take a look at seven restaurant stocks to watch in 2019, and try to pick out the winners in this group. Restaurant Stocks to Watch: McDonald's (MCD)Stance: BullishAnalysis: At the top of the list of restaurant stocks to watch in 2019 is global fast casual giant McDonald's (NYSE:MCD).The story here is simple. Over the past several years, McDonald's has reinvented itself to be more relevant to today's health-conscious consumers. That included revamping the menu, improving product quality and expanding product assortment. In so doing, McDonald's has improved relevance and popularity, while sustaining industry-wide low prices and high convenience. The net result has been robust comparable sales growth.This will continue. McDonald's is continuing to revamp its menu, including swapping out frozen patties for fresh patties, and as these initiatives continue to roll out, the numbers here will remain good. Meanwhile, the valuation on MCD stock is reasonable and in line with its long-term average. As such, upward and outward is the most likely path forward for MCD stock in 2019. Chipotle (CMG)Stance: BearishAnalysis: Second on this list is Chipotle (NYSE:CMG), the restaurant chain which has come back from the dead to once again become a Wall Street (and Main Street) favorite.Right now, everyone on Wall Street is applauding Chipotle's new growth initiatives, including delivery expansion, menu innovation and new marketing campaigns. These initiatives are good, and they are working. Comparable sales growth has been consistently positive and impressive. Margins are moving higher. Profits are rising. Everything is going right for Chipotle. * 7 Financial Stocks With Accelerating Growth But the valuation more than reflects these positives, and importantly ignores competition risks. Namely, Chipotle isn't what it used to be, nor will it ever be again. The healthy food trend has passed the company up, and now all the craze is about unique sushi, poke bowls, superfood cafes and fresh sandwich shops. Thus, while growth will remain good going forward, it won't ever become good enough to warrant a nearly 50x forward multiple on CMG stock, meaning the next move in this stock will likely be lower. Yum (YUM)Stance: NeutralAnalysis: Next up is global fast casual giant Yum (NYSE:YUM), the parent company of Taco Bell, KFC and Pizza Hut.The fundamentals here are pretty good. Taco Bell is on fire, and has been for a long time due to favorable millennial appeal. KFC is doing just fine as well. Pizza Hut is finally returning to growth after several bad quarters. Meanwhile, the company is re-franchising essentially all of its locations and turning into an asset-light, hugely profitable, money-making machine. This re-franchising does kill revenues, but the revenue slicing is like getting rid of all the unwanted fat. Profits are consequently moving higher.All of this will continue for the foreseeable future. You will get steady and healthy comparable sales and bottom line growth. But, the valuation underlying YUM stock seems to already reflect that, with the forward P/E multiple at a multiyear high approaching 25 and the trailing dividend yield at a multiyear low of 1.8%. As such, the valuation seems full, meaning that the strong fundamentals won't drive that much more upside in YUM stock. Yum China (YUMC)Stance: NeutralAnalysis: Any discussion of Yum would be incomplete without talking about its Chinese counterpart, Yum China (NYSE:YUMC).At its core, Yum China is at the heart of a still very healthy China restaurant growth narrative. For all intents and purposes, China remains a double-digit consumption growth economy thanks to urbanization and digitization tailwinds, while the dining market remains a high single-digit growth sector of that red-hot economy, powered by deeper digital penetration and robust unit growth (restaurants per capita in China remain well below the developed country norm). * 10 Hot Stocks Leading the Market's Blitz Higher Because of this, Yum China will remain a big revenue and profit grower over the next several years. Ultimately, those healthy fundamentals will push YUMC stock higher. But, at current levels (nearly a 25x forward earnings while it sits near 52-week highs), YUMC stock seems more than priced for big growth to persist. As such, valuation will cap upside in the near term. Restaurant Stocks to Watch: Starbucks (SBUX)Stance: BearishAnalysis: Another restaurant stock worth watching in 2019 is global coffee giant Starbucks (NASDAQ:SBUX), mostly because the stock appears to be out over its skis at the current moment.In the big picture, Starbucks is a stable growth company that has been, still is and will remain the leader of the global retail coffee game. But competitors are chipping away at that leadership position. Namely, indie coffee shops are stealing away trend-oriented consumers, while McDonald's and other fast casual giants are stealing away price-oriented consumers. Thus, while Starbucks will remain the leader in the breakfast drink category, the company will lose share in this market for the foreseeable future.The net result will be slower-than-normal revenue and profit growth. The reason that's a problem for SBUX stock is that it isn't priced for slower-than-normal growth. Instead, SBUX stock has a bigger-than-normal valuation at around 26 forward earnings. This convergence of slower-than-normal growth and a bigger-than-normal valuation will ultimately result in SBUX stock falling later in 2019. Domino's Pizza (DPZ)Stance: NeutralAnalysis: One restaurant stock that investors should pay close attention to given its secular attachment to the delivery aspect of the food industry is Domino's Pizza (NYSE:DPZ).For a long time, Domino's and other pizza chains were the only game in town when it came to fast food delivery. Thus, the delivery tailwind and the mainstream emergence of the stay-at-home economy was a big positive for this company. But, then food ordering platforms like Postmates and Door Dash democratized delivery services. Now, essentially every fast food chain has delivery capability. * Should You Buy, Sell, Or Hold These 7 Medical Cannabis Stocks? This has leveled the playing field in the delivery game, and neutralized a big advantage Domino's had over its peers. Nonetheless, management continues to do everything right to keep growth on track, and the company is also benefiting from persistent struggles at Papa John's (NASDAQ:PZZA). Thus, in the big picture, growth remains good here -- it will just slow going forward. Good but slower growth seems appropriately priced in here, at 29x forward earnings (in line with its long term average multiple). Dave & Buster's (PLAY)Stance: BullishAnalysis: Last but not least on this list of restaurant stocks to watch is multi-entertainment destination Dave & Buster's (NASDAQ:PLAY).I'm bullish on PLAY stock for one simple reason: the company is perfectly aligned to win as we increasingly shift towards an experience-oriented consumer economy. Long story short, consumers are increasingly valuing experiences over products, and consumption expenditure growth on experiences has significantly outpaced consumption expenditure growth on products over the past few years. Dave & Buster's is at the heart of this transition by offering a multi-entertainment experience that includes a restaurant, sports bar and arcade.Over time, consumers will continue to place greater emphasis on experiences. The net result will be more share of wallet allocated to Dave & Buster's. That will push revenues, margins and profits higher, which will ultimately drive PLAY stock to new highs over time.As of this writing, Luke Lango was long MCD and PLAY. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * The 10 Best Cheap Stocks to Buy Right Now * 5 Stocks Under $5 to Buy Before They Soar * 5 Consumer Stocks to Cash Out Of Compare Brokers The post 7 Restaurant Stocks to Watch in 2019 appeared first on InvestorPlace.
On Feb. 15, Jean Philippe Courtois made a sizable sale of Microsoft Corp. The company's executive vice president and president of Microsoft Global Sales, marketing and operations, Courtois sold off shares worth $3.04 million. This top-performing analyst, one of the Top 10 ranked by TipRanks out of more than 5,000, has a price target of just $75 on shares.
Bill Ackman (Trades, Portfolio), manager of Pershing Square Capital Management, disclosed last week that his fund introduced two new positions and boosted four positions during the fourth quarter of 2018. Warning! GuruFocus has detected 5 Warning Sign with HLT. The fund manager said in his Feb. 13, 2019, investor presentation that Pershing Square returned -0.7% for 2018, outperforming the Standard & Poor's 500 index return of -4.4%.
McDonald's Stock Up after Stephens UpgradeStephens upgradeToday, Stephens upgraded McDonald’s from “equal weight” to “overweight,” stating that lower expectations for McDonald’s in 2019 provided room for positive surprises, reported
To receive further updates on this Starbucks (NASDAQ:SBUX) trade as well as an alert when it's time to take profits, sign up for a risk-free trial of Strategic Trader today.We are opening a new bullish trade on Starbucks (NASDAQ:SBUX). This will be the second put write we've recommended on SBUX this year, and we are expecting this trade to be just as successful as the last one. Focusing on GrowthWe have been watching SBUX closely to see if the stock would pull back after the former CEO began talking about a potential run for president in 2020, but the stock continues to stay above its previous resistance level at $69.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThis is a good indication traders aren't too concerned about any of Howard Shultz's campaign comments having an impact on the stock.Instead, we still anticipate traders will be focusing on the company's strong growth potential -- SBUX experienced global comparable store sales growth of 4% and added 541 net new stores during the previous quarter -- and strong dividend. $69 Resistance is Now SupportOur regular readers know old resistance often becomes new support. SBUX traded above $69 a little over a week ago, and now it may drift back down to re-test $69 as support. We expect it to hold, and SBUX could head higher if it does.Daily Chart of Starbucks (SBUX) -- Chart Source: TradingViewSince the selloff in December 2018, SBUX has been gradually heading higher and higher. It crossed above its 50-day moving average in mid-January, and it established support at around the $65 level.With the stock just above $70, now would be a great time to sell puts near SBUX's current support.To find out which SBUX puts we're selling -- and to get access to our full portfolio of income-generating trades -- consider signing up for risk-free trial subscription to Strategic Trader today. InvestorPlace advisers John Jagerson and S. Wade Hansen, both Chartered Market Technician (CMT) designees, are co-founders of LearningMarkets.com, as well as the co-editors of Strategic Trader.Follow our Facebook page to receive each Trade of the Day direct to your News Feed -- and join the conversation.Compare Brokers The post SBUX is Trading Above Old Resistance at $69 appeared first on InvestorPlace.
The Starbucks Reserve Dewata in the Indonesian island of Bali is the only branch in the world to have its own coffee farm inside Starbucks. From valet parking to a concierge desk — where customers are escorted to the main door — this new Starbucks Reserve on the island of Bali, Indonesia feels more like a luxury hotel rather than a coffee shop. Officially known as the Starbucks Dewata Coffee Sanctuary, it is largest Starbucks in Southeast Asia and brings the Starbucks Reserve experience to a new level.
ROE helps investors distinguish profit-generating companies from profit burners and is useful in determining the financial health of a company.