Investing

Earnings Previews: Apple, Starbucks, Visa

Sentiment on Starbucks tilts toward the upside. Of 32 analysts surveyed, 19 rate the shares a Buy or Strong Buy. Another 12 have a Hold rating on the shares. Recently, the stock has traded close to its median price target of $125. At the high price target of $142, the upside potential for the share price is about 13.8%.

For the company’s fiscal third-quarter revenue, analysts are forecasting $7.26 billion, or 8.8% higher sequentially and up 72% year over year. EPS of $0.77 is miles ahead of last year’s loss of $0.46 per share, as well as up 25% sequentially. For the full fiscal year, analysts are looking EPS to rise by 156% year over year on a sales jump of 22.5% to $28.8 billion.

Starbucks stock trades at 41.6 times expected 2021 EPS, 27.0 times estimated 2022 earnings and 13.6 times estimated 2023 earnings. The stock’s 52-week range is $74.56 to $126.32. Starbucks pays an annual dividend of $1.80 (yield of 1.43%).

Visa

Dow Jones industrial average component Visa Inc. (NYSE: V) has added about 28% to its share price over the past 12 months, including a year-to-date of around 13.7%. For comparison, American Express’s share price growth so far in 2021 is nearly 45% and its 12-month share price growth is almost 85%. And Visa’s market cap is around $528 billion compared to Amex’s $139.5 billion.

To boost its competitiveness, Visa last week announced the acquisition of a London-based fintech firm named Currencycloud for around $967 million to bolster its currency exchange offerings. Visa also launched a new branding campaign last week.

Of 38 analysts covering the stock, 33 rate the shares a Buy or a Strong Buy. At a trading price of around $248.20, the stock’s upside potential, based on a median price target of $269, is about 8.4%. At the high price target of $305, the implied upside is about 23%.

The consensus estimate for third fiscal quarter revenue is $5.85 billion, or up 2% sequentially and nearly 21% year over year. EPS are forecast to slip by about 2.4% sequentially to $1.35 in the quarter but increase by around 27% year over year. For the full fiscal year, the current estimates call for EPS of $5.66 (up 12.4% year over year) and revenue of $23.67 billion (up 8.34%).

Visa stock trades at 43.7 times expected 2021 EPS, 34.8 times estimated 2022 earnings and 29.2 times estimated 2023 earnings. The stock’s 52-week range is $179.23 to $250.46. Visa pays an annual dividend of $1.28 (yield of 0.51%).