Starbucks (NASDAQ:SBUX) Stock Price Down 4% - Here's Why

Key Points

• Starbucks' stock price fell 4% to $82.94, with trading volume down 78% from its daily average, indicating heightened market volatility.
• Several analysts have raised their ratings on Starbucks, with the average price target now at $104.00, suggesting a generally positive outlook despite the recent stock drop.
• The company also announced an increase in its quarterly dividend from $0.61 to $0.62 per share, reflecting its commitment to returning value to shareholders.

Starbucks Corporation (NASDAQ:SBUX - Get Free Report)'s share price dropped 4% during trading on Monday . The company traded as low as $83.29 and last traded at $82.94. Approximately 2,255,475 shares traded hands during mid-day trading, a decline of 78% from the average daily volume of 10,177,264 shares. The stock had previously closed at $86.42.

Wall Street Analysts Forecast Growth

A number of equities analysts have weighed in on the company. Baird R W raised Starbucks from a "hold" rating to a "strong-buy" rating in a research report on Tuesday, August 12th. Wells Fargo & Company increased their price objective on shares of Starbucks from $100.00 to $105.00 and gave the company an "overweight" rating in a research report on Wednesday, July 30th. TD Cowen reaffirmed a "hold" rating and issued a $95.00 target price on shares of Starbucks in a research report on Thursday, September 25th. Zacks Research raised Starbucks from a "strong sell" rating to a "hold" rating in a report on Wednesday, October 1st. Finally, Sanford C. Bernstein raised their price target on Starbucks from $90.00 to $100.00 and gave the stock an "outperform" rating in a research note on Wednesday, July 2nd. One research analyst has rated the stock with a Strong Buy rating, fifteen have assigned a Buy rating, ten have given a Hold rating and two have given a Sell rating to the company. According to MarketBeat.com, the company presently has an average rating of "Moderate Buy" and an average price target of $104.00.

Starbucks Stock Performance

The firm has a market cap of $93.33 billion, a P/E ratio of 35.39, a P/E/G ratio of 4.25 and a beta of 1.01. The firm's fifty day simple moving average is $87.56 and its 200 day simple moving average is $88.46.

Starbucks (NASDAQ:SBUX - Get Free Report) last posted its earnings results on Tuesday, July 29th. The coffee company reported $0.50 EPS for the quarter, missing analysts' consensus estimates of $0.64 by ($0.14). The firm had revenue of $9.46 billion during the quarter, compared to analysts' expectations of $9.29 billion. Starbucks had a negative return on equity of 36.23% and a net margin of 7.18%.Starbucks's quarterly revenue was up 3.8% on a year-over-year basis. During the same quarter in the prior year, the firm posted $0.93 earnings per share. On average, equities research analysts predict that Starbucks Corporation will post 2.99 earnings per share for the current year.

Starbucks Increases Dividend

The firm also recently declared a quarterly dividend, which will be paid on Friday, November 28th. Investors of record on Friday, November 14th will be paid a dividend of $0.62 per share. The ex-dividend date of this dividend is Friday, November 14th. This is a positive change from Starbucks's previous quarterly dividend of $0.61. This represents a $2.48 dividend on an annualized basis and a yield of 3.0%. Starbucks's payout ratio is currently 105.17%.

Institutional Trading of Starbucks

A number of large investors have recently made changes to their positions in SBUX. Vanguard Group Inc. raised its position in Starbucks by 0.7% during the second quarter. Vanguard Group Inc. now owns 112,861,623 shares of the coffee company's stock valued at $10,341,511,000 after purchasing an additional 802,053 shares during the period. State Street Corp raised its holdings in Starbucks by 1.2% during the 2nd quarter. State Street Corp now owns 47,513,332 shares of the coffee company's stock valued at $4,353,647,000 after buying an additional 544,534 shares during the period. Geode Capital Management LLC lifted its position in Starbucks by 0.4% in the second quarter. Geode Capital Management LLC now owns 25,846,634 shares of the coffee company's stock worth $2,357,815,000 after buying an additional 99,983 shares during the last quarter. Wellington Management Group LLP boosted its stake in Starbucks by 22.3% during the first quarter. Wellington Management Group LLP now owns 19,414,472 shares of the coffee company's stock worth $1,904,366,000 after buying an additional 3,545,655 shares during the period. Finally, Nuveen LLC purchased a new position in Starbucks during the first quarter worth $1,379,619,000. 72.29% of the stock is currently owned by institutional investors.

About Starbucks

Starbucks Corporation, together with its subsidiaries, operates as a roaster, marketer, and retailer of coffee worldwide. The company operates through three segments: North America, International, and Channel Development. Its stores offer coffee and tea beverages, roasted whole beans and ground coffees, single serve products, and ready-to-drink beverages; and various food products, such as pastries, breakfast sandwiches, and lunch items.

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