The Zacks Analyst Blog Highlights: Starbucks, Visa and eBay

For Immediate Release

Chicago, IL – July 29, 2020 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Starbucks SBUX, Visa V and eBay EBAY.

Here are highlights from Tuesday’s Analyst Blog:

Starbucks, eBay, Visa All Beat Bottom-Line Expectations

What started out as a fairly negative overall environment in Tuesday’s pre-market trading wound up following through as the day progressed, and even accelerated going into the close ahead of some key earnings reports. The Nasdaq shed 1.27%, or 134 points, to 10,402; the Dow lost 205 points, -0.77%, to 26,379 and the S&P 500 fell 21 points, or -0.65%, to 3218.

Both earnings and economic reads will pick up the pace for the remainder of the week, with some of the world's biggest companies still yet to report. Plus the first look at Q2 GDP, Home Sales, Trade and Jobless Claims — just to name a few — await investors through the last trading week of July.

Starbucks, unsurprisingly, posted a bottom-line loss in its fiscal Q3 report at -46 cents per share, but definitely better than the Zacks consensus of -61 cents. We say “unsurprisingly” as Starbucks is one of the main companies to have struggled with the “shelter in place” initiatives that kept people from passing by their local Starbucks storefront on the way to the office. Revenues also came in higher than expected — $4.22 billion versus $4.11 billion.

Same-store sales were predictably dismal: Global -40%, U.S. -41%, China -19% — partially offset by a 25% increase in average ticket price. That said, the coffee retail giant has now posted a 19-quarter string of earnings beats, last missing in fiscal Q4 2015.

Visa, one of the all-time earnings all-stars, which has never missed a consensus earnings estimate since its IPO in 2008, once again beat on the bottom line, this time by 5 cents to $1.07 per share. Revenues in the quarter of $4.84 billion narrowly beat the $4.81 billion our analysts were looking for, though down roughly 17% from the year-ago top-line figure.

Total payments were down 10% year over year, with total processing down 13% to $30.7 billion. Visa has also withdrawn full-year guidance. (That’s one way to keep an extra-long winning streak intact.) For more on V's earnings, click here.

eBay, a Zacks Rank #1 (Strong Buy)-rated stock with a Value-Growth-Momentum score of B, also outpaced estimates on top and bottom lines in its Q2 report. Earnings of $1.08 per share topped expectations by 3 cents, while $2.87 billion in quarterly sales bettered the $2.80 billion projected.

Yet shares are down 5.5% on the news, as eBay had been known as a big beneficiary of the pandemic realities (in a sort of reversal of Starbucks for the quarter) and risen 45% over the past 3 months. Guidance was increased, including full-year revenues of $10.56 billion - $10.75 billion — well beyond the consensus $10.34 billion previously expected.

There’s no sugar-coating it: Q2 earnings season is going to be a rough one. That many companies have so far been able to absorb the bad news pretty much in stride is a testament to good company leadership, for the most part, as well as an investment scenario always on the lookout for a positive angle. But with some of the biggest companies yet to report, we will withhold judgment on the quarter as a whole for now.

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Starbucks Corporation (SBUX) : Free Stock Analysis Report
 
eBay Inc. (EBAY) : Free Stock Analysis Report
 
Visa Inc. (V) : Free Stock Analysis Report
 
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