Starbucks (NASDAQ:SBUX) Trading Down 17% on Disappointing Earnings

Shares of Starbucks Co. (NASDAQ:SBUX) fell 17% on Wednesday after the company announced weaker than expected quarterly earnings. The company traded as low as $73.44 and last traded at $73.48. 31,017,782 shares were traded during mid-day trading, an increase of 257% from the average session volume of 8,687,718 shares. The stock had previously closed at $88.49.

The coffee company reported $0.68 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.79 by ($0.11). Starbucks had a negative return on equity of 50.76% and a net margin of 11.70%. The business had revenue of $8.56 billion for the quarter, compared to analyst estimates of $9.12 billion. During the same quarter last year, the business earned $0.74 EPS. Starbucks’s revenue for the quarter was down 1.8% compared to the same quarter last year.

Starbucks Announces Dividend

The business also recently declared a quarterly dividend, which will be paid on Friday, May 31st. Stockholders of record on Friday, May 17th will be given a dividend of $0.57 per share. This represents a $2.28 dividend on an annualized basis and a dividend yield of 3.10%. The ex-dividend date of this dividend is Thursday, May 16th. Starbucks’s payout ratio is currently 60.96%.

Wall Street Analysts Forecast Growth

SBUX has been the topic of several research reports. BTIG Research dropped their price objective on shares of Starbucks from $115.00 to $100.00 and set a “buy” rating on the stock in a research note on Wednesday. Evercore ISI lowered their target price on Starbucks from $120.00 to $92.00 and set an “outperform” rating for the company in a report on Wednesday. BMO Capital Markets lowered their target price on Starbucks from $125.00 to $120.00 and set an “outperform” rating for the company in a report on Wednesday, January 31st. JPMorgan Chase & Co. lowered their target price on Starbucks from $107.00 to $100.00 and set an “overweight” rating for the company in a report on Tuesday, March 19th. Finally, Wells Fargo & Company reissued an “overweight” rating and issued a $105.00 price objective on shares of Starbucks in a report on Monday, April 1st. Sixteen analysts have rated the stock with a hold rating and nine have assigned a buy rating to the stock. According to MarketBeat.com, Starbucks currently has an average rating of “Hold” and a consensus price target of $102.48.

Insider Transactions at Starbucks

In other news, CEO Michael Aaron Conway sold 3,250 shares of the firm’s stock in a transaction on Monday, April 15th. The shares were sold at an average price of $85.39, for a total value of $277,517.50. Following the sale, the chief executive officer now owns 81,199 shares in the company, valued at $6,933,582.61. The sale was disclosed in a filing with the SEC, which is available at this hyperlink. Over the last quarter, insiders have sold 7,250 shares of company stock worth $651,738. Insiders own 1.98% of the company’s stock.

Hedge Funds Weigh In On Starbucks

Several institutional investors have recently modified their holdings of SBUX. Prosperity Consulting Group LLC bought a new stake in shares of Starbucks during the 1st quarter worth approximately $268,000. Stegent Equity Advisors Inc. acquired a new position in shares of Starbucks during the 1st quarter worth $449,000. Diversify Advisory Services LLC acquired a new stake in Starbucks in the first quarter valued at about $2,299,000. Vantage Investment Partners LLC grew its position in Starbucks by 0.9% in the first quarter. Vantage Investment Partners LLC now owns 131,620 shares of the coffee company’s stock valued at $12,032,000 after acquiring an additional 1,154 shares during the last quarter. Finally, Hartline Investment Corp acquired a new position in Starbucks during the first quarter worth about $368,000. 72.29% of the stock is currently owned by institutional investors and hedge funds.

Starbucks Trading Down 17.0 %

The business’s 50 day moving average price is $90.17 and its two-hundred day moving average price is $94.25. The company has a market capitalization of $83.19 billion, a price-to-earnings ratio of 19.65, a P/E/G ratio of 1.49 and a beta of 0.97.

About Starbucks

Starbucks Corporation, together with its subsidiaries, operates as a roaster, marketer, and retailer of coffee worldwide. The company operates through three segments: North America, International, and Channel Development. Its stores offer coffee and tea beverages, roasted whole beans and ground coffees, single serve products, and ready-to-drink beverages; and various food products, such as pastries, breakfast sandwiches, and lunch items.