Stock Analysis | Starbucks Outlook - Technical Caution Amid Mixed Analyst Sentiment

Market Snapshot

Caution Advised: Starbucks (SBUX.O) faces weak technical momentum with a 8.02% recent price decline.

News Highlights

Recent headlines impacting the broader market include:

• Trade War Concerns: Trump's proposed tariffs on Canada, Mexico, and China could increase operating costs for restaurants, including Starbucks, by raising prices on commodities like fruits and beer.
• Hyatt's Expansion: Hyatt's new soft brand "Unscripted" aims to bring independent hotels into its loyalty ecosystem, signaling competitive pressure in the hospitality sector, which indirectly affects Starbucks' retail environment.
• DoorDash Relief Efforts: DoorDash is providing financial aid to small restaurants impacted by wildfires, which might indicate a broader recovery trend in the restaurant sector that could benefit Starbucks in the long term.

Analyst Views & Fundamentals

Analysts remain divided in their near-term views. The simple average rating stands at 3.62, while the performance-weighted average rating is slightly higher at 3.64. The ratings are consistent, with most analysts either neutral or recommending a buy. However, this contrasts with the stock's recent price decline.

Key fundamental factors are mixed, with the internal diagnostic score for overall fundamentals at 2.16:

• Return on Assets (ROA): 1.90%, with a score of 2.00
• Net Profit Margin (NPM): 4.38%, with a score of 2.00
• Net Income to Revenue: 3.38%, with a score of 2.00
• Cash Flow from Operations (CFOA): 0.61%, with a score of 1.00
• Inventory Turnover Days: 24.57 days, with a score of 1.00
• Long-Term Debt to Working Capital Ratio: 7.09%, with a score of 1.00

Notably, Starbucks has seen a -35.16% YoY decline in net profit attributable to parent company shareholders, scoring low at 2.00 in the model.

Money-Flow Trends

Large investors are cautious, with the big-money fund-flow ratio at 46.00% and the overall trend negative. Small retail investors are also showing a negative trend, with an inflow ratio of 49.74%. This signals broad-based caution among both institutional and individual investors.

Key Technical Signals

Technically, Starbucks has a weak outlook, scoring 4.00 in our internal diagnostic system. Recent signals include:

• Williams %R Oversold: Score: 2.35 (internal diagnostic score)
• MACD Death Cross: Score: 6.28 (internal diagnostic score)
• Ex-Dividend Date: Score: 3.68 (internal diagnostic score)
• Dividend Record Date: Score: 3.68 (internal diagnostic score)

From August 15 to August 25, the Williams %R Oversold condition occurred multiple times, suggesting a potential bounce but not a clear trend. The MACD Death Cross signaled bearish momentum on August 20, adding to the caution.

Overall, technical indicators show that the market is in a volatile state, and the direction is not clear enough. Bearish signals are clearly dominant (3 vs. 0 bullish).

Conclusion

With mixed analyst sentiment, a weak technical backdrop, and ongoing concerns over trade policy and operating margins, consider waiting for a clearer trend before committing new capital to Starbucks. Watch for upcoming earnings and key inflation data, which could provide more clarity on the company's trajectory.