Starbucks (NASDAQ:SBUX) Stock Price Down 17% After Earnings Miss

Starbucks Co. (NASDAQ:SBUX) was down 17% during mid-day trading on Wednesday following a dissappointing earnings announcement. The company traded as low as $73.44 and last traded at $73.48. Approximately 31,017,782 shares changed hands during mid-day trading, an increase of 257% from the average daily 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 analysts’ consensus estimates of $0.79 by ($0.11). The business had revenue of $8.56 billion for the quarter, compared to analyst estimates of $9.12 billion. Starbucks had a negative return on equity of 50.76% and a net margin of 11.70%. The firm’s revenue for the quarter was down 1.8% compared to the same quarter last year. During the same period in the previous year, the business posted $0.74 earnings per share.

Starbucks Dividend Announcement

The firm also recently disclosed a quarterly dividend, which will be paid on Friday, May 31st. Investors 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 3.06%. The ex-dividend date of this dividend is Thursday, May 16th. Starbucks’s payout ratio is 60.96%.

Wall Street Analyst Weigh In

Several research firms have weighed in on SBUX. JPMorgan Chase & Co. dropped their target price on Starbucks from $100.00 to $92.00 and set an “overweight” rating for the company in a research report on Wednesday. BMO Capital Markets decreased their price objective on Starbucks from $125.00 to $120.00 and set an “outperform” rating for the company in a research note on Wednesday, January 31st. BTIG Research decreased their price objective on Starbucks from $115.00 to $100.00 and set a “buy” rating for the company in a research note on Wednesday. Oppenheimer reiterated a “market perform” rating on shares of Starbucks in a research note on Friday, April 19th. Finally, Deutsche Bank Aktiengesellschaft cut Starbucks from a “buy” rating to a “hold” rating and decreased their price objective for the company from $108.00 to $89.00 in a research note on Wednesday. Sixteen equities research analysts have rated the stock with a hold rating and nine have issued a buy rating to the company’s stock. Based on data from MarketBeat.com, the company currently has a consensus rating of “Hold” and an average price target of $100.39.

Insider Buying and Selling at Starbucks

In other news, CEO Michael Aaron Conway sold 3,250 shares of the company’s stock in a transaction on Monday, April 15th. The stock was sold at an average price of $85.39, for a total value of $277,517.50. Following the sale, the chief executive officer now directly owns 81,199 shares in the company, valued at $6,933,582.61. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this hyperlink. Over the last 90 days, insiders have sold 7,250 shares of company stock valued at $651,738. Insiders own 1.98% of the company’s stock.

Institutional Trading of Starbucks

Institutional investors and hedge funds have recently made changes to their positions in the stock. Scarborough Advisors LLC purchased a new stake in shares of Starbucks in the fourth quarter valued at $26,000. Vima LLC purchased a new position in Starbucks during the fourth quarter worth about $26,000. DSM Capital Partners LLC purchased a new position in Starbucks during the fourth quarter worth about $27,000. Fairman Group LLC purchased a new position in Starbucks during the fourth quarter worth about $30,000. Finally, Riggs Asset Managment Co. Inc. lifted its position in Starbucks by 1,578.9% during the third quarter. Riggs Asset Managment Co. Inc. now owns 319 shares of the coffee company’s stock worth $29,000 after buying an additional 300 shares during the period. 72.29% of the stock is currently owned by hedge funds and other institutional investors.

Starbucks Price Performance

The company has a 50-day moving average of $89.76 and a two-hundred day moving average of $94.11. The stock has a market capitalization of $84.28 billion, a PE ratio of 19.90, 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.