July 4, 2024
Top 10 Stock Starbucks Strong Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Starbucks – Top 10 Stock in NASDAQ 100 Index
Starbucks is listed as a top 10 stock on July 04, 2024 in the market index NASDAQ 100 because of its high performance in at least one of the Obermatt investment strategies. As all consolidated Obermatt Ranks exhibit excellent performance, including positive market sentiment in the professional investor community, it is a solid stock investment where the risk of paying too much for the shares is limited. Based on the Obermatt 360° View of 90 (top 90% performer), Obermatt assesses an overall strong buy recommendation for Starbucks on July 04, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Restaurants |
| Index | Dividends USA, Diversity USA, Renewables Users, NASDAQ 100, NASDAQ, S&P US Luxury, S&P 500 |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Starbucks Strong Buy
| 360 METRICS | July 4, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 78 |
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| GROWTH | ||||||||
| GROWTH | 67 |
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| SAFETY | ||||||||
| SAFETY | 57 |
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| SENTIMENT | ||||||||
| SENTIMENT | 66 |
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| 360° VIEW | ||||||||
| 360° VIEW | 90 |
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ANALYSIS: With an Obermatt 360° View of 90 (better than 90% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Starbucks are very positive. The 360° View is based on consolidating four consolidated indicators, with all four indicators above average for Starbucks. The consolidated Value Rank has an attractive rank of 78, which means that the share price of Starbucks is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 78% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 67, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. The company is also safely financed with a Safety rank of 57. Finally, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 66. ...read more
RECOMMENDATION: With a consolidated 360° View of 90, Starbucks is better positioned than 90% of all alternative stock investment opportunities based on the Obermatt Method. As all consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 78), above-average growth (Growth Rank of 67), safe financing practices (Safety Rank of 57), and a positive market sentiment in the professional investor community (Sentiment Rank of 66), it is a solid stock investment where the risk of paying too much for the shares is limited and disappointments are less likely to occur, unless information not publicly available. High-Value Ranks sometimes indicate that the company's future is challenging. If they are safely financed and have above average growth, and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of Starbucks is as difficult as the stock’s low price, despite what good growth and safe financing practice suggest. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible, which may indicate good timing right now. ...read more
Sentiment Strategy: Professional Market Sentiment for Starbucks positive
ANALYSIS: With an Obermatt Sentiment Rank of 66 (better than 66% compared with alternatives), overall professional sentiment and engagement for the stock Starbucks is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Starbucks. Analyst Opinions are at a rank of 15 (worse than 85% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 49, which means that stock research experts are getting even more pessimistic. Other sentiment indicators are positive: The Professional Investors rank is 78, which means that professional investors hold more stock in this company than in 78% of alternative investment opportunities. So, pros tend to favor investing in this company. In addition, Market Pulse has a rank of 69, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 69% of competitors). While stock research analysts are getting ever more critical, many professional investors are committed to Starbucks and the professional news channels are on the positive side. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 66 (more positive than 66% compared with investment alternatives), Starbucks has a reputation among professional investors that is above-average compared with that of its competitors. This is an ambiguous picture: analysts are negative and getting even more critical, while the news in the market is positive. Who should investors believe? This is a difficult question in such a situation. Investors should proceed cautiously and verify not only the financial performance in the Obermatt Value, Growth and Safety Ranks but also independent news coverage of the company. ...read more
Value Strategy: Starbucks Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 78 (better than 78% compared with alternatives) for 2024, Starbucks shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Starbucks. Expected dividend yields are higher than for 86% of comparable companies (a Dividend Yield rank of 86), making the stock attractive. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 89, which means that the stock price is lower compared with invested capital than for 89% of comparable investments. But in respect to sales and profits, the picture is reversed. Price-to-Sales is 21 which means that the stock price compared with what market professionals expect for future profits is higher than for 79% of comparable companies, indicating a low value concerning Starbucks's sales levels. The Price-to-Profit ratio (also referred to as price-earnings (P/E) ratio) is also unfavorable for Starbucks with a rank of 34. This means that the stock price, compared with what market professionals expect for future profits, is higher than for 66% of comparable companies, indicating a low value concerning Starbucks's profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 78, is a buy recommendation based on Starbucks's stock price compared with the company's operational size and dividend yields. The company seems confident that it can generate a reasonable return on invested capital, because it pays an above-average dividend while profits are below what you would expect for a company with this stock price. If you agree with this practice and believe that profits will return to higher levels, as the current dividend policy suggests, Starbucks may be an attractive investment. If this is not the case, you may want to be careful with this stock as it is also expensive compared with its expected revenue levels. ...read more
Growth Strategy: Starbucks Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 67 (better than 67% compared with alternatives), Starbucks shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below-average for Starbucks. While Sales Growth ranks at 74, professionals currently expect the company to grow more than 74% of its competitors, while all other growth ranks are below the market median. Profit Growth has a rank of 49, which means that, currently, professionals expect the company to grow its profits less than 51% of its competitors, and Capital Growth has a low rank of 49. Historic stock returns were also below average with a current Stock Returns rank of 49 which means that the stock returns have recently been below 51% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 67, is a buy recommendation for growth and momentum investors. If revenues are expected to increase, but all other growth indicators are negative, the company may be investing in future growth through means not visible in the balance sheet and thus not reflected in capital growth. The fact that Stock Returns have been below market doesn't mean that much, as it may be due to overly optimistic investor behavior in the past, which has been corrected to a more reasonable level recently. If that were the case, a positive Value Rank would be a reason to invest because the company is still expected to grow, while stock prices are now at a more reasonable level. ...read more
Safety Strategy: Starbucks Debt Financing Safety above-average
| SAFETY METRICS | July 4, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 2 |
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| REFINANCING | ||||||||
| REFINANCING | 58 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 99 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 57 |
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ANALYSIS: With an Obermatt Safety Rank of 57 (better than 57% compared with alternatives), the company Starbucks has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Starbucks is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for Starbucks. Refinancing is at 58, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 58% of its competitors. Liquidity is also good at 99, meaning the company generates more profit to service its debt than 99% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 2, which means the company has an above-average debt-to-equity ratio. It has more debt than 98% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 57 (better than 57% compared with alternatives), Starbucks has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Starbucks could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. ...read more
Combined financial peformance: Starbucks Top Financial Performance
| COMBINED PERFORMANCE | July 4, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 78 |
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| GROWTH | ||||||||
| GROWTH | 67 |
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| SAFETY | ||||||||
| SAFETY | 99 |
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| COMBINED | ||||||||
| COMBINED | 90 |
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ANALYSIS: With an Obermatt Combined Rank of 90 (better than 90% compared with investment alternatives), Starbucks (Restaurants, USA) shares have much better financial characteristics than comparable stocks. Shares of Starbucks are a good value (attractively priced) with a consolidated Value Rank of 78 (better than 78% of alternatives), show above-average growth (Growth Rank of 67), and are safely financed (Safety Rank of 57), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 90, is a strong buy recommendation based on Starbucks's financial characteristics. As the company Starbucks's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 78), above-average growth (Obermatt Growth Rank of 67), and indicate that the company is safely financed (Obermatt Safety Rank of 57), it is a solid stock investment where the risk of paying too much for the share is limited, unless the company has a bleak future. Such good financial performance can indicate that the company's future might actually be challenging, as it may be difficult to maintain the good performance. If they are safely financed and have been growing above average, and are still a good value, it means that the market is keeping prices low, for a reason which may become clearer over time. We recommend evaluating the future of Starbucks. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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