Starbucks Corp
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Consumer Discretionary : Hotels, Restaurants & Leisure | Large Cap Blend
Company profile

Starbucks Corp is a coffee roaster and retailer of specialty coffee with operations in approximately 82 markets around the world. The Company has over 32,000 Company-operated and licensed stores. It operates through three segments: Americas, International and Channel Development. It also sells a variety of coffee and tea products and license its trademarks through other channels, such as licensed stores, grocery and foodservice. It purchases and roasts coffees that it sells, along with handcrafted coffee, tea and other beverages and a variety of food items through Company-operated stores. In addition to its flagship Starbucks Coffee brand, it sells goods and services under various brands, including Teavana, Seattle’s Best Coffee, Evolution Fresh, Ethos, Starbucks Reserve and Princi.

Closing Price
$86.96
Day's Change
-1.34 (-1.52%)
Bid
--
Ask
--
B/A Size
--
Day's High
88.39
Day's Low
85.63
Volume
(Heavy Day)
Volume:
11,402,795

10-day average volume:
7,054,138
11,402,795

UPDATE: Roku's ad commentary leaves some to 'assume very weak trends' for April as stock dips

11:37 am ET May 9, 2020 (MarketWatch)
Print

By Emily Bary

Roku still expects 'substantial revenue growth' this year but says ad cancellations have increased

Roku Inc.'s earnings call left some analysts wanting more as the company discussed the impacts of ad-market weakness on its business.

Shares of Roku (ROKU) are down 7% in Friday trading after the company's latest report, which highlighted increased interest among subscribers in purchasing subscriptions through the Roku platform but also disruptions to the company's advertising business as marketers pull back spending.

See more: Roku stock falls after coronavirus drives increase in advertising cancellations (http://www.marketwatch.com/story/roku-stock-dips-after-coronavirus-drives-higher-than-usual-advertising-cancellations-2020-05-07)

"Management expects 'substantial revenue growth year over year, albeit at a slower pace' for advertising," wrote Oppenheimer's Jason Helfstein. "We assume this suggests advertising 20% year over year. However, management did not give specific ad growth for April, causing some to assume very weak trends."

He continues to rate the stock at outperform while raising his price target to $135 from $120.

"While near-term revenue will slow dramatically on reduced advertising and sponsorship, many factors suggest Roku/[over-the-top programming] will emerge from COVID-19 much stronger," he wrote, citing viewership increases and the possibility of a breakdown in the traditional "upfront" model of TV ad buying, which in his view could lead more marketers to make real-time or programmatic buys through Roku.

For Morgan Stanley's Benjamin Swinburne, Thursday afternoon's report was further fodder for his downbeat view on Roku's stock. "Pre-COVID deceleration is being amplified by ad budget cuts, putting Roku's premium multiple at risk," he wrote, while maintaining an underweight rating and a $110 target price.

See also: Sonos gets into the services business with new Sonos Radio streaming offering (http://www.marketwatch.com/story/sonos-gets-into-the-services-business-with-new-sonos-radio-streaming-offering-2020-04-21)

Benchmark's Daniel Kurnos wrote that he "expected margins to come under pressure over time, especially short-term as ad dollars were pulled back in the AVOD [advertising-based video on demand] channel, and the negative mix shift clearly weighed on near-term results."

Still, he reiterated an upbeat view of Roku's prospects as "all of the momentum drivers, including player sales, streaming hours and new active accounts" saw further improvement in April. "Even when things begin to normalize and sports returns, given how small OTT is as a portion of overall budgets, we find it hard to envision a scenario where Roku does not keep their share," Kurnos wrote.

The analyst has a buy rating and $153 target price on the stock.

At least six analysts raised their price targets on Roku's stock after the report, according to FactSet, while at least two lowered their's. Of the 21 analysts tracked by FactSet who cover the stock, 14 have buy ratings, five have hold ratings, and two have sell ratings, with an average price target of $131.01.

Shares of Roku have added 3.7% over the past three months as the S&P 500 has declined 12%.

-Emily Bary; 415-439-6400; AskNewswires@dowjones.com

(END) Dow Jones Newswires

May 09, 2020 11:37 ET (15:37 GMT)

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