A hot cup of coffee at Starbucks (NASDAQ:SBUX) has been an American institution for decades. Ever since an episode of “The Simpsons” famously featured Starbucks locations moving into every store in the Springfield Mall, that’s been the case. But there are some less pleasant signs about this quarter’s overall performance. That concern has investors pulling out significantly in Tuesday afternoon’s trading.
Starbucks has been on a downward trend for the last 11 sessions now, and there are a few signs that this trend will abate any time soon. Indeed, Red Cup Day results look more like a red flag for potential trouble ahead. Meanwhile, word out of China suggests that the Chinese are turning lukewarm toward Starbucks’ hot coffee. Third-party sales data isn’t providing any favors either, demonstrating a slump already in progress as people turn away from various Starbucks beverages en masse.
There was some hope for progress from the return of the Pumpkin Spice Latte back in August. Still, analyst word suggests that not even pumpkin spice could light enough of a fire under Starbucks results to make this quarter a winner.
Starbucks is Suffering from Two Directions at Once
Starbucks is suffering from two directions at once here. Not only is it facing the disaster of an economic downturn, it’s also facing labor issues. The economic downturn was readily demonstrated by the surge in buy now pay later (BNPL) spending that Black Friday brought with it this year. But Starbucks also had troubles with its workers, demonstrated by the Red Cup Day boycotts that cost it a combined total of $11 billion, thanks to losses in its market cap.
What is a Good Price for Starbucks Stock?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on SBUX stock based on seven Buys and 12 Holds assigned in the past three months, as indicated by the graphic below. After a 3.58% loss in its share price over the past year, the average SBUX price target of $111.13 per share implies 15.57% upside potential.
