Starbucks Stock Back To All Time Highs With More To Come

Wednesday, March 17, 2021 | Sam Quirke
Starbucks Stock Back To All Time Highs With More To ComeA 2% jump in Tuesday’s session had shares of coffee giant Starbucks (NASDAQ: SBUX) up to fresh all-time highs. It’s been a solid first quarter for the Seattle headquartered company and comes on the back of a stellar 2020.

The stock was trading near highs right as the pandemic hit the markets around this time last year, but quickly gained a reputation on Wall Street as one that would recover quicker than most. With all of that damage undone and shares above their previous highs, it’s safe to say it was a reputation well deserved. Even with the ongoing rally, however, it looks like there’s still room ahead for Starbucks to run.

Run Of Upgrades

BTIG upped their rating on the stock from Neutral to a Buy yesterday, and see Starbucks continuing to benefit from the ongoing economic recovery and reopening. In a note to clients, analyst Peter Saleh said "in the near-term, we expect 2QF21 EPS to top consensus expectations as the company laps the initial impact from the pandemic in China (February) and U.S. (March) and we view guidance as overly conservative. For the balance of the year, we expect same-store sales to materially accelerate due to easier comparisons, reopenings and federal stimulus. The combination of unfolding economic recovery, earnings upside and broad geographic profile leads us to become more positive on shares and upgrade accordingly."

On top of this uber bullish sentiment, a fresh price target of $130 from Saleh suggests upside of close to 20% even from Tuesday’s closing high. The move from BTIG mirrors that of their peers in BMO Capital who also upgraded the stock late last month. They too named Starbucks as “a reopening beneficiary with meaningful potential upside to FY21/FY22 consensus”.

Wells Fargo has been another sell-side voice that’s been impressed with them and recently flagged Starbucks as one of the top consumer stocks to own for 2021. In a powerful statement from the last week of February, they noted how they “had never seen consumers emerge from a recession as strong as they are right now.”

On top of all this, Gordon Haskett and Cowen have also both recently highlighted Starbucks as a must-own stock for the post-COVID recovery. Analyst Jeff Farmer from the former pointed to "the company's increasingly aggressive pursuit of competitive advantages across digital, delivery, convenience, customer loyalty and labor force stability” as factors that will set it up well for future growth. Cowen loves how digital Starbucks has become, and is backing consumer companies with a high level of digitalization to outperform the broader market in the coming months.

Solid Potential

All this will be music to the bull's ears and should tempt even the more cautious investor to consider getting involved. Shares were trading at highs before the pandemic, and look set to be trading at highs after the pandemic too. There’s a nice ring to that kind of a label and you’d be hard-pressed to find many other brick and mortar-based stores that can boast the same.

Just last week we saw both New York and New Jersey were planning to increase indoor dining restrictions to 50% of capacity, so there can be no doubt that the economic reopening is well and truly underway. Starbucks has positioned itself as a consumer staple that can pivot when needs be, and should be a good value for money to continue setting highs into the second quarter of the year.

Starbucks Stock Back To All Time Highs With More To Come

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7 Stocks to Support Your New Year’s Resolutions

After a year like 2020, many Americans figure that just getting to 2021 was enough. But for many people, the start of a new year still means making resolutions. And while many Americans are still waking up to Groundhog’s Day, there is hope that things will look dramatically different in September than they do right now.

Some of the most popular resolutions include losing weight, exercising more, or taking steps to get our life and/or business more organized. And many pure-play companies lean into these trends and are doing well.

As an alternative to this, you can also invest in companies that are not pure plays but can still benefit from consumers looking to start fresh. Owning these stocks helps you manage your risk. If the trend holds, you can ride the wave. On the other hand, if the wave turns into a ripple, the stocks have other catalysts to get them through.

In this special presentation, we’ll take a look at both of these categories. We’ve got several pure-play companies that let investors buy stocks in companies benefiting from these trends. We’ll also give you a few stocks that fall in the latter category.

These are stocks that you might buy at any time and for many reasons. However, they present excellent buys as the new year begins.

View the "7 Stocks to Support Your New Year’s Resolutions".


Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Starbucks (SBUX)2.5$114.300.0%1.57%148.44Buy$120.75
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