Please ensure Javascript is enabled for purposes of website accessibility

Why Starbucks' Stock Is Rising Today

By John Rosevear – Apr 22, 2020 at 1:19PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

An upbeat analysts' note ahead of earnings has investors in a buying mood.

What happened

Shares of coffee giant Starbucks (SBUX 1.47%) were moving up on Wednesday, after an analyst raised his price target for the stock ahead of next week's earnings report. 

As of 2 p.m. EDT today, Starbucks' shares were up about 5.7% from Tuesday's closing price. 

So what

In a note on Wednesday morning, MKM Partners analyst Brett Levy raised his price target for Starbucks' stock to $70 from $60, while maintaining a neutral rating on the stock. 

Levy said that he's raising his estimate for Starbucks' earnings per share to $0.30 from $0.13, and his estimate for revenue to $5.8 billion from $5.2 billion, as he believes that the company's sales declines in the quarter were more moderate than previously expected. 

A Starbucks coffee cup.

Image source: Starbucks.

Starbucks moved its stores to takeout-only service in mid-March, but it has been able to keep many open on that limited basis even as other retail-focused businesses have shut down amid the coronavirus pandemic.

Levy also said that the recent stock market recovery, and signs that investors are willing to look past near-term issues with businesses like Starbucks, drove an increase in his view of the stock's valuation.

Now what

Investors won't have to wait too long to find out if Levy is right. Starbucks will report its fiscal second-quarter earnings after the market closes next Tuesday, April 28. 

John Rosevear owns shares of Starbucks. The Motley Fool owns shares of and recommends Starbucks. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Starbucks Stock Quote
Starbucks
SBUX
$89.81 (1.47%) $1.30

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
342%
 
S&P 500 Returns
110%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/05/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.