From Investing.com: 2024-05-01 10:32:20

Shares of Starbucks plunged 15% to a two-year low due to weak demand from U.S. customers affected by inflation and slow economic recovery in China. Price hikes led customers to drink coffee at home, causing a drop in same-store sales for the first time in nearly three years.

Deutsche Bank downgraded Starbucks to “hold” and 12 brokerages cut target prices. The company slashed its full-year sales and profit growth forecasts, citing customers’ changing spending habits post-stimulus savings. CEO Narasimhan emphasized trade-offs between eating out and at home. Analysts at Jefferies are skeptical of Starbucks’ new product plans.

Starbucks’ forward P/E multiple is 20.88, slightly lower than industry peers McDonald’s and Restaurant Brands. The focus on core menu, value, promotions, and loyalty is seen as prudent by analysts. The coffee giant faces challenges ahead with uncertainties in customer behavior and ongoing macroeconomic dynamics.



Read more at Investing.com: Starbucks shares hit two-year low as China, US demand clouds outlook By Reuters