will report earnings on Tuesday, and while Covid-19 remains a very real threat, investors are already looking ahead to the coffee giant’s post-pandemic future.
Starbucks (SBUX) delivered a better-than-expected fiscal fourth quarter in October, and predicted a faster recovery from the virus crisis than expected. That was a welcome change from the summer, when the pandemic caused it to post a loss and prompted management to warn that a rebound might take longer than some bulls hoped.
Barron’s and some Wall Street analysts have argued that Covid is only a temporary setback. The company has remained resilient and stepped up customer-retention efforts while pivoting to a new strategy, optimists argue.
Still, with the virus still killing thousands of Americans a day, even bulls warn that this week’s earnings report may not show much progress toward a comeback. Fewer people are visiting Starbucks stores, though Placer.ai noted that the picture did brighten toward the end of the year. Visits during the week of Dec. 28 were down 17.5% year over year, the company’s best showing since mid-October.
Starbucks has gained nearly 17% in the past year, but the stock is off 3% in 2021.
Analysts are looking for earnings per share of 55 cents and revenue of $6.91 billion. That compares with 51 cents in the previous quarter and 79 cents in the year-earlier period.
The Street is pretty evenly split on the stock. Forty-seven percent of analysts have a Buy rating or the equivalent on Starbucks, while the remaining 53% rate it at Hold. The average price target is $109.47. There are no bearish calls on the stock.
Starbucks will host a conference call to discuss the results at 5 p.m. Eastern time on Tuesday.
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