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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Starbucks Corporation (XNAS:SBUX) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
SBUX
Name:
STARBUCKS CORPORATION (XNAS:SBUX)
Sector:
1.45B
Industry:
Restaurants
CEO:
Mr. Kevin Johnson
Total Employees:
383,000
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 154.62% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF STARBUCKS CORPORATION(SBUX) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND RESTAURANTS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
82.94
One Month Price Target:
$83.38
Six Month Price Target :
$85.56
Likely Price in One Year's Time:
Ticker:
$88.18
Likely Trading Range Today Under (Normal Volatility)
$82.64
Price Upper limit ($) :
$83.27
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$79.11
This week:
$74.38
This month :
$65.82
Other Primary facts
Market Cap:
96.98B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
1.15B
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
14.73%
-16.2%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$100.71
$92.60
$65.17
$73.28
Medium risk (<10%) entry points
Buy Call
Sell Call
$89.96
Buy Put:
Sell Put:
$88.22
$75.90
$77.66
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
SBUX
Sharpe Ratio:
0.46%
Comparison:
SBUX, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -72.22% lower than the industry
& is -79.91% lower than the market/S&P 500 average
Average Returns/Yield of
SBUX
Daily returns:
0.02%
Weekly returns:
0.10%
Monthly returns:
0.38%
Yearly returns:
16.01%
Comparison of returns:
Average annual returns/yield (last 3 years) is -71.26% below industry average
Classification:
SBUX, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.98
Statistical test of Returns:
SBUX has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.26%
Weekly Volatility:
5.05%
Monthly Volatility:
10.09%
Yearly Volatility:
34.96%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.97%
Volatility in last five trading days has been -12.57% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.62%
Weekly VaR:
-10.32%
Monthly VaR:
-20.64%
How Much Can the price of
SBUX
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-18%
Worst case (decline):
-71.51%
This translates to price declining to:
$67.98
This translates to price declining to:
$23.63
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
SBUX is a 45.70% riskier investment compared to the market/S&P 500 & is 24.82% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -35.37% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
SBUX
Beta in relation to market/S&P 500--0.94
Expected beta in 1 year's time:
0.679
Expected beta in 3 year's time:
0.96
Unlevered (debt free) Beta:
-0.955
Beta in relation to Nasdaq (XNAS):
0.915
Beta in relation to all global stocks::
0.788
Beta Comparison & Analysis
Beta of competitors/peers::
1.378
Beta is -31.83% lower than peers
Average Industry Beta:
1.354
Beta is -30.62% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
-0.050
Alpha is -238.69% below industry average alpha yield
Alpha is -317% below the market average
Analysis of Cost of Capital of
SBUX
Equity cost of capital:
0.096
Equity cost of capital is -22.85% below industry mean WACC
Unlevered (without debt) cost of capital:
-9.74%
Before-tax cost of debt:
1.97%
After-tax cost of debt:
1.56%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.56%
WACC is -26.75% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$27.30
Revenue growth rate per share of (3Y):
-11.26
Annual revenue growth rate is 55.59% above the industry average
EPS:
$3.74
Expected Annual growth rate of EPS (3Y):
6.88%
Expected future EPS growth rate is 100.64% higher than the Restaurants industry
Free cash flow (FCF) per share:
$3.03
Balance sheet equity growth per share: 34.84%
Equity growth rate per share is -460.22% lower than the industry
Debt per share
$18.56
EBITDA per share
$6.62
Valuation Analysis Today of
SBUX
P/E Ratio:
23.31
P/E Ratio of Competitors/Peers:
77.13
P/E ratio is -69.78% lower than main peers & is -1.49% lower than the industry
Stock price/value with industry average P/E ratio: $88.49
SBUX is -6.27% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $49.13
Present value of the expected future dividends only: $25.32
P/S (Price to Sales ratio):
3.04
Price to sales ratio is -6.88% below the industry mean
P/B (Price to book value ratio):
-11.26
Price to free cash flow: 27.41
Price to free cash flow ratio is -50.00% lower than the industry
Net income growth rate (3Y):
3.11%
Net income growth rate is -98.21% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 13.07%
Dividend yeild: 2.31%
Previous Dividend: $0.49
Previous adjusted dividend: $0.49
Previous Dividend: $1.92
Expected next dividend best case: $0.52
Expected next dividend worst case: $0.46
Average dividend payment (long-term): $0.45
Average dividend increase/decrease (growth rate) % per period: 1.86%
Expected next dividend payment date: 25/08/2022
Expected next dividend record date: 08/11/2022
Expected next dividend declaration date: 13/06/2022
Previous dividend payment date: 27/05/2022
Previous dividend record date: 13/05/2022
Previous dividend declaration date: 15/03/2022
Dividend History:
2022-05-12--$0.49
2021-11-10--$0.49
2021-05-12--$0.45
2022-02-10--$0.49
2021-08-11--$0.45
2021-02-17--$0.45
Dividend growth rate is -181.71% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
-251.79%
Net debt to equity ratio:
-233.85%
Debt to assets ratio:
73.85%
Net debt to assets ratio:
68.59%
Debt-to-asset ratio is -53.14% below industry average
Ability to repay debt:
Interest coverage ratio:
16.21
Interest coverage ratio is -8.33% less than industry average
Looking forward:
Debt growth rate:
44.39%
Annual debt growth is 19% higher than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.791
Statistical significance of correlation:
SBUX has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.517
Stock price is 53.10% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.517
Correlation of price movement with Nasdaq (^IXIC):
-0.008
Covariance of price movement with the market:
-0.011
Kurtosis
9.268
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.144
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
SBUX
Gross Profit Margin Ratio:
111%
Operating Profit Margin Ratio:
16.27%
Operating profit margin is 73.08% higher than the industry
Net Profit Margin Ratio:
111%
Effective Tax Rate:
21.22%
Effective tax rate is 22.16% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-52.12%
Return on equity (ROE) is -16385.51% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
15.29%
Return on assets (ROA) is 7.70% higher than the industry
Financial Leverage:
3.8x
Current Ratio:
0.81
Current ratio is -27.60% below industry average
Cash Conversion Cycle (days):
-1.1
Cash conversion cycle is -103.22% below industry average
The remaining useful life of property plant & equipment is: 7.4 years
Stock based compensation to net income ratio:
2.17%
In-depth Efficiency Analysis
Revenue generated per employee:
81.8K
Each employee generates -27% less revenue than industry average revenue per employee
EBITDA generated per employee:
19.8K
Each employee generates -22% less EBITDA than industry average revenue per employee
Profit generated per employee:
11.5K
Each employee generates -19% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
3.8K
Each employee generates 57% more free cash flow than industry average revenue per employee
Assets/Capital per employee
56.3K
Each employee generates 57% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
SBUX
JD.COM, INC. (XNAS:JD)
BOOKING HOLDINGS INC. (XNAS:BKNG)
RIVIAN AUTOMOTIVE, INC. (XNAS:RIVN)
Mercado Libre, Inc. (XNAS:MELI)
MARRIOTT INTERNATIONAL, INC. (XNAS:MAR)
O'Reilly Automotive, Inc. (XNAS:ORLY)
LULULEMON ATHLETICA INC. (XNAS:LULU)
EBAY INC. (XNAS:EBAY)
ROSS STORES, INC. (XNAS:ROST)
Current Analyst Ratings
Strong buy�42%
Buy�58%
Hold�38%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
4/3/22
Revenue:
31.33B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
22.64B
8.68B
-
2.00B
2.00B
-
1.83B
3.83B
103.80M
468.50M
1.53B
7.59B
5.10B
4.41B
5.60B
1.19B
4.41B
Statement of Cash Flow
Date:
Period:
386.40M
Differed Income Tax :
- 300.00K
Stock Based Compensation :
95.80M
Change in Working Capital :
198.40M
Accounts Receivables:
- 91600.00K
Other Working Capital:
540.70M
Other Non-Cash Items:
374.70M
Net Cash Provided by Operating Activities:
1.87B
Investments in PP&E:
- 416800.00K
Net Acquisitions:
-
Purchases of Investments:
- 61000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
1/2/22
2022
Q1
3.97B
87.40M
4.06B
1.15B
1.64B
409.70M
7.26B
14.60B
3.68B
302.50M
551.50M
1.86B
588.00M
21.58B
-
28.83B
1.29B
2.45B
575.70M
2.07B
3.11B
8.92B
21.29B
621.10M
28.36B
-
37.28B
1.20M
- 8753000.00K
253.5M
-
January 2, 2022 at 7:00:00 AM
26.47B
- 8457200.00K
28.83B
638.90M
23.75B
19.8B
118.20M
- 41400.00K
- 401000.00K
-
41.30M
- 3520900.00K
- 576000.00K
86.40M
- 3969200.00K
13.00M
- 2486300.00K
3.97B
6.46B
1.87B
- 416800.00K
1.45B
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
SBUX
2023
2024
2025
2026
2027
$88.62
$165.31
$175.74
$186.83
$198.63