While Starbucks Corp (NASDAQ:SBUX) derives some benefit from being in a sector that is ranked above average in investment attractiveness, its industry group is ranked well below average in attractiveness which may offset this in whole or in part. Aspects of this recommendation include a ranking in the company's industry group that is in the middle third-below average, a ranking in its sector group that is in the third quarter, a numerical calculation of risk/reward that is below average, and analytical scoring that is above average. SBUX is rated as a Sell by means of the Portfolio Grader stock evaluator. The approach to investing incorporated in this analytical tool assesses and ranks nearly 5,000 stocks each week from a fundamental and quantitative perspective. This represents no change from the previous week and is the same ranking SBUX has had from Portfolio Grader for 7 months.
The company is one of the 257 companies in the GICS Consumer Services sector and is a member of the 57 company Restaurants GICS industry group within this sector. SBUX has a market value of $78.5 billion which is in the top decile in its industry group The ranking for SBUX by Portfolio Grader places it 34 among the 57 companies in this industry group, giving it a below-average spot.
The Consumer Services sector is ranked number 5 among the 20 sectors in the Portfolio Grader universe putting it in the second quartile of all the GICS sectors. The Restaurants industry group is ranked 97 among the 129 industry groups within the GICS sectors, placing it well below-average in terms of the Proprietary Quantitative Score scoring system.
The company scores are below-average in 2 of the 8 areas evaluated by Portfolio Grader in the ranking of company stocks.
The company's operational scores provide mixed results with rankings for operating margin and earnings growth that are well above average, while the score for sales growth is below average. Scores for visibility of earnings are mixed, with a ranking for earnings revisions and earnings surprises that are better than average, while the score for earnings momentum is worse than average. SBUX's scores for cash flow and return on equity are better than its industry group average. Starbucks' fundamental scores give SBUX a place in the top decile of the industry group.
Portfolio Grader quantitatively gauges SBUX's shares using the Proprietary Quantitative Score. This metric looks at SBUX's shares from the aspect of risk/reward. This unique scoring approach balances the relative value of SBUX's shares based on the recent $53.82 share price of the shares relative to its peers, the market and risk associated with its industry and sector groups. Considering this risk/reward calculation, the company currently scores below-average in its industry group compared to its peers.
The Proprietary Portfolio Grader stock ranking system assesses roughly 5,000 companies every week based on a number of fundamental and quantitative measures. Stocks are given a letter grade based on their results, with A being 'strong buy' and F being 'strong sell'. Explore the tool here.
Commentary provided by UpTick Data Technologies.