November 23, 2023
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 November 23, 2023 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 91 (top 91% performer), Obermatt assesses an overall strong buy recommendation for Starbucks on November 23, 2023.
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 | November 23, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 66 |
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| GROWTH | ||||||||
| GROWTH | 67 |
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| SAFETY | ||||||||
| SAFETY | 50 |
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| SENTIMENT | ||||||||
| SENTIMENT | 92 |
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| 360° VIEW | ||||||||
| 360° VIEW | 91 |
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ANALYSIS: With an Obermatt 360° View of 91 (better than 91% compared with alternatives) for 2023, 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 66, 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 66% 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 50. Finally, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 92. ...read more
RECOMMENDATION: With a consolidated 360° View of 91, Starbucks is better positioned than 91% 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 66), above-average growth (Growth Rank of 67), safe financing practices (Safety Rank of 50), and a positive market sentiment in the professional investor community (Sentiment Rank of 92), 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 very positive
ANALYSIS: With an Obermatt Sentiment Rank of 92 (better than 92% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Starbucks is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Starbucks. Analyst Opinions are at a rank of 29 (worse than 71% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 88, which indicates a shift in stock research experts opinions for the better. In other words, they are getting more optimistic about stock investments in Starbucks. Even better, the Professional Investors rank is 86, meaning that professional investors hold more stock in this company than in 86% of alternative investment opportunities. Pros tend to favor investing in this company. Furthermore, Market Pulse has a rank of 93, which means that the current professional news and professional social networks are upbeat when discussing this company (more positive news than for 93% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 92 (more positive than 92% compared with investment alternatives), Starbucks has a reputation among professional investors that is significantly higher than that of its competitors. While analysts are still critical of the company, some are changing their minds. In addition, the professional news channels are optimistic, and many institutional investors have already bought stock in the company. These are encouraging signals, despite the still lower level of analyst recommendations. They may be due to a problematic past, and about to change. The positive sentiment signals are stronger than the negative. ...read more
Value Strategy: Starbucks Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 66 (better than 66% compared with alternatives), Starbucks shares are more attractively priced than the majority of 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 82% of comparable companies (a Dividend Yield rank of 82), 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 92, which means that the stock price is lower compared with invested capital than for 92% of comparable investments. But in respect to sales and profits, the picture is reversed. Price-to-Sales is 11 which means that the stock price compared with what market professionals expect for future profits is higher than for 89% 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 26. This means that the stock price, compared with what market professionals expect for future profits, is higher than for 74% of comparable companies, indicating a low value concerning Starbucks's profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 66, 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
| GROWTH METRICS | November 23, 2023 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 74 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 57 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 30 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 63 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 67 |
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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 all but one indicator above average for Starbucks. Sales Growth has a rank of 74 which means that currently, professionals expect the company to grow more than 74% of its competitors. Both Profit Growth, with a rank of 57, and Stock Returns, with a rank of 63, are also above average. But Capital Growth only has a rank of 30, which means that, currently, professionals expect the company to grow its invested capital less than 70% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 67, is a buy recommendation for growth and momentum investors. That may be a good sign if the company is already well positioned and doesn't require more investments at this time. They may focus on growing the top (revenues) and bottom (profits) lines, recently rewarded with above-average stock returns for shareholders. But it may also be a sign of danger as the company is falling back with capital investment activities concerning competition. This requires further analysis of corporate communications. ...read more
Safety Strategy: Starbucks Debt Financing Safety above-average
| SAFETY METRICS | November 23, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 2 |
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| REFINANCING | ||||||||
| REFINANCING | 58 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 92 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 50 |
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ANALYSIS: With an Obermatt Safety Rank of 50 (better than 50% 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 92, meaning the company generates more profit to service its debt than 92% 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 50 (better than 50% 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 | November 23, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 66 |
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| GROWTH | ||||||||
| GROWTH | 67 |
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| SAFETY | ||||||||
| SAFETY | 92 |
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| COMBINED | ||||||||
| COMBINED | 76 |
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ANALYSIS: With an Obermatt Combined Rank of 76 (better than 76% 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 66 (better than 66% of alternatives), show above-average growth (Growth Rank of 67), and are safely financed (Safety Rank of 50), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 76, 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 66), above-average growth (Obermatt Growth Rank of 67), and indicate that the company is safely financed (Obermatt Safety Rank of 50), 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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