Shares of Starbucks jumped as much as 6% in premarket trading Wednesday after the company’s July sales showed signs that the company’s recovery from the coronavirus pandemic lockdowns is picking up.
Starbucks Corporation SBUX -1.7% is scheduled to report earnings after Tuesday’s close. The stock hit a record high of $99.72/share in 2019 and is currently trading near $74/share. The stock is prone to big moves after reporting earnings and can easily gap up if the numbers are strong. Conversely, if the numbers disappoint, the stock can easily gap down.
Analyst Jon Tower initiated coverage on Starbucks (ticker: SBUX) with an Overweight rating and $92 price target, writing on Monday that “investors currently underappreciate the pliability of Starbucks’ business model and sustainability of long-term sales drivers in the presence of temporary disruptions of the business related to Covid-19.”
For the last reported quarter, Starbucks came out with earnings of $0.32 per share versus the Zacks Consensus Estimate of $0.31 per share, representing a surprise of 3.23%. For the previous quarter, the company was expected to post earnings of $0.76 per share and it actually produced earnings of $0.79 per share, delivering a surprise of 3.95%.
Investors in China’s Luckin Coffee (OTC:LKNC.Y) have had to deal with a lot of surprises this year. Revelations of fraudulent accounting practices led to a long suspension in trading of the shares on the Nasdaq exchange. Top executives were ousted from the coffee store chain’s C-suite. And finally, Luckin shareholders got what many had considered to be the final straw: notice that the stock would get delisted from the Nasdaq.
The COVID-19 pandemic threw a spanner in Starbucks’ growth plans, causing the coffee chain to falter as it had to shut numerous stores around the world. However, the company is still one of the stronger consumer stocks to own due to its brand strength and track record.
Farmer Bros (NASDAQ:FARM) was downgraded by Zacks Investment Research from a “hold” rating to a “sell” rating in a research report issued to clients and investors on Monday, Zacks.com reports.
Other institutional investors have also recently made changes to their positions in the company. Capital Wealth Alliance LLC bought a new stake in Starbucks in the fourth quarter valued at about $25,000. RMR Wealth Builders bought a new stake in Starbucks in the fourth quarter valued at about $26,000.
Luckin Coffee Inc. (LK) – Get Report said Tuesday that it has received a formal delisting notice from the Nasdaq as the China-based rival to Starbucks (SBUX) – Get Report continues to suffer the fallout from its multi-million dollar ‘fake sales’ scandal.
Banks including Credit Suisse Group AG and Morgan Stanley face a $300 million shortfall on margin loans to the embattled founder of Luckin Coffee Inc.