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Valued at $116.2 billion by market cap, Starbucks Corporation (SBUX) is a global leader in the coffeehouse industry. Headquartered in Seattle, Washington, the company specializes in premium coffee, beverages, and a variety of food items, with a focus on delivering high-quality customer experiences. With a strong presence in over 80 countries, Starbucks is known for its innovative approach to retail, digital engagement, and sustainability, continually shaping the future of coffee culture and creating a welcoming environment for customers worldwide.

Companies worth $10 billion or more are generally considered "large-cap" stocks, and Starbucks easily fits into this category. This coffeehouse giant epitomizes growth and consistency in the food and beverage sector. From its humble beginnings as a single store in Seattle, Starbucks has brewed up a global presence, leading the coffee culture worldwide.

Starbucks Corporation is down marginally from its 52-week high of $103.32, achieved on Nov. 25. Shares of Starbucks gained 8% over the three months, underperforming the Consumer Discretionary Select Sector SPDR Fund’s (XLY) 20.6% gains during the same time frame.

Over the long term, SBUX has gained 6.7% on a YTD basis, and the shares are up 2.6% over the past 52 weeks. By contrast, XLY has gained 24.3% in 2024 and 31.5% over the past year.

However, SBUX has been trading above its 200-day moving averages since mid-August and 50-day moving averages since early November, indicating a bullish price trend.

Starbucks reported its Q4 earnings on Oct. 30, showing a slight uptick in stock price post-release. The coffeehouse reported a 7% decline in global comparable store sales. The company opened 722 net new stores, bringing the total to 40,199. Consolidated net revenues fell 3% year over year to $9.1 billion, including a decline on a constant currency basis.

Operating margins contracted significantly, with GAAP operating margin decreasing by 380 basis points to 14.4%, largely due to higher investments in store partner wages, benefits, and promotional activity. GAAP and non-GAAP earnings per share both declined by 25%, reflecting ongoing pressure.

Its rival, McDonald's Corporation (MCD), has gained 5.6% over the past 52 weeks, outpacing SBUX’s performance during the same period.

Despite SBUX’s underperformance compared to the broader sector over the past year, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 29 analysts in coverage, and the mean price target of $103.92 suggests a premium of 1.4% to its current levels.

On the date of publication, Rashmi Kumari did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here. More news from Barchart

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