Earnings example: what to expect from Starbucks today

Starbucks
SBUX
Corp. is scheduled to report earnings after Tuesday’s close. The stock hit an all-time high of $126.32/share in 2021 and is currently trading near $84/share. The stock is prone to big moves after earnings reports and can easily explode if the numbers are strong. Conversely, if the numbers disappoint, the stock can easily go down. To help you prepare, here’s what the street expects:

Income example:

The company is expected to report earnings of $0.77 per share on $8.14 billion in revenue. Meanwhile, the so-called Whisper number is a profit of $0.75/share. The Whisper Number is the unofficial take on the street’s revenue.

A closer look at the basics:

The company’s revenues have slowed significantly in recent quarters, which is not an ideal sign. Investors are looking for a bullish catalyst to push the stock higher. The company had to contend with labor problems and a very strong US dollar (damaging international numbers) in the quarter. It will be interesting to see how the company fared last quarter in light of all these headwinds.

A closer look at the technique:

Technically, the stock recently collapsed during the big sell-off on Wall Street. The stock is down more than 45% from its 52-week high, depressing valuation significantly. The lower valuation could attract value investors looking for a bargain. The stock is not yet considered cheap, but it is much “cheaper” than where it was a few months ago.

Pay attention to how the stock reacts to the news:

From where I sit, the main trait I look for during earnings season is how the market and a specific company react to the news. Remember, always keep your losses small and never argue with the tape.

Disclosure: the share is included in the FindLeadingStocks.com report.