Trading Starbucks Post Q1 Earnings

February 07, 2023 09:15

Starbucks recently reported its first-quarter earnings report for 2023. The multinational American coffee chain has 33,833 stores in 80 countries and is often seen as a barometer of the health of the consumer.  

Learn more details of Starbucks’ latest quarterly earnings report, what the analysts are forecasting for the stock and how to trade Starbucks shares below.

Stock: Starbucks Corp
Symbol for Invest.MT5 Account: SBUX
Date of Idea: 8 Feb 2023
Time Line: 1 - 6 months
Entry Level: $112.00
Target Level: $138.00
Position Size for Invest.MT5 Account: Max 5%
Risk: High
  • The Invest.MT5 account allows you to buy real stocks and shares from 15 of the largest stock exchanges in the world.

Past performance is not a reliable indicator of future results or future performance.

All trading is high risk and you can lose more than you risk on a trade. Never invest more than you can afford to lose as some trades will lose and some trades will win. Start small to understand your own risk tolerance levels or practice on a demo account first to build your knowledge before investing. 

Starbucks Q1 Earnings Report

Here are some of the key highlights from the latest first-quarter earnings report from Starbucks: 

  • Revenue of $8.71 billion vs $8.78 billion expected 
  • Earnings per share of 75 cents per share vs 77 cents expected 
  • Net income of $855.20 million up from $815.90 million a year earlier 
  • Net sales rose 8% to $8.71 billion  
  • Same-store sales growth in the US was up 10% 
  • Same-store sales internationally were down 13% mostly down to China 
  • Same-store sales in China were down 42% in December but only down 15% in January 
  • 459 new locations opened in the quarter 

While Starbucks missed its earnings estimates for revenue and earnings per share, most of this was down to a plunge in sales in China. During the quarter, China’s government ended its zero Covid policy causing a wave of new infections and outbreaks of the virus. More than 1,800 stores of 6,090 locations in China were closed.  

Overall, this caused a 42% drop in same-store sales in the month of December. However, management highlighted that the drop is now only 15% in January and is forecasting a reversal of this trend in the second half of the year.  

As stores reopen in China and the economy starts moving again it could prove to be a boost for the coffee chain who is already experiencing decent growth in its US market. Starbucks is now forecasting revenue growth of 10% to 12% for its fiscal 2023 year.   

Outgoing CEO Howard Schultz – due to be replaced by Laxman Narasimhan on 1 April – also teased a new announcement sometime in February that he discovered in Italy last summer that could be a “transformative new category.”  

It is worthwhile remembering that a huge risk factor still remains even if China does rebound. Fears of a recession and a slowdown in consumer purchases are likely to hit coffee chains. With a higher cost of living and inflation, if consumers cut down on non-essential items this could impact sales at Starbucks.  

Starbucks Stock Forecast - What do the Analysts Say?

According to analysts polled by TipRanks for a Starbucks stock forecast in the past 3 months, there are currently 10 buys, 12 holds and 0 sell ratings on the stock. The highest price level for a Starbucks stock forecast is $138.00 with the lowest price target at $91.00. 

The average price target for a Starbucks stock forecast is $114.25.

Source: TipRanks, 7 Feb 2023


An Example Trading Idea for the Starbucks Stock Price

An example trading idea for the Starbucks share price could be as follows:  

  • Buy the stock on a break above the post-earnings high at $112.00. 
  • Target the highest analyst price target at $138.00. 
  • Keep your risk small at a maximum of 5% of your total account.   
  • Time Line = 1 – 6 months  
  • If you buy 10 Starbucks shares:  
    • If the target is reached = $260.00 potential profit ($138.00 - $112.00 *10 shares).

Remember that markets go up and down and it is unlikely the share price will move up in a straight line. In fact, it may even go much further down before it rises, especially considering how much a potential Covid resurgence in a region could impact sales, fears of a recession and a possible consumer slowdown.

Be sure to exercise good risk management and always know how much you could potentially lose on a trade and the risks involved, as well as the costs.

With the Admirals Invest.MT5 account you can buy and sell US stocks with a commission from $0.02 per share. This means buying 10 shares in Starbucks stock would result in a commission of $0.20 ($0.02 * 10 shares) for executing a per-side transaction.

There is a low minimum transaction fee of $1. So, the example trading idea above would result in a commission of just $1 overall. 

How to Buy Starbucks Stock in 4 Steps  

With Admirals, you can buy shares in companies like Starbucks with a low commission of just $0.02 per share and a low minimum commission of just $1 on US stocks. 

  1. Open an account with Admirals to access the Trader’s Room.   
  2. Click on Trade on one of your live or demo accounts to open the web platform.   
  3. Search for your stock at the bottom of the Market Watch window and drag the symbol onto the chart.   
  4. Use the one-click trading feature, or right-click and open a trading ticket to input your trade size, stop loss and take profit level. 
Source: Admirals MetaTrader 5 Web. Past performance is not a reliable indicator of future results, or future performance.


Click on the banner below to trade Starbucks stock today. ▼▼▼ 

Do You See the Starbucks Stock Price Moving Differently?   

Remember that all analytics and trading ideas are based on the personal view and experience of the author.  

If you believe there is a higher chance Starbucks's share price will move lower, then you can also trade short from a CFD (Contracts for Difference) trading account which Admirals also provide.  

The Trade.MT5 and Trade.MT4 account allows you to speculate on the price direction of stocks and shares using CFDs.  

This means you can trade long and short to potentially profit from rising and falling stock prices. Learn more about CFDs in this How to Trade CFDs article. 


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Jitanchandra Solanki
Jitanchandra Solanki Financial Markets Author, Admirals London

Jitanchandra is a financial markets author with more than 15 years experience trading currencies, indices and US equities. He is an accredited Market Technician with a BA Hons degree.