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Can Starbucks and McDonald’s Maintain Their Upward Momentum?

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Jun. 12 2019, Updated 3:48 p.m. ET

How Starbucks has performed

As of June 11, Starbucks (SBUX) was trading at $82.37, which represents a rise of 27.9% since the beginning of this year. Also, the company was trading at a discount of 1.2% from its 52-week high of $83.33, and a premium of 73.9% from its 52-week low of $47.37.

From the above graph, we can see that Starbucks has outperformed the S&P 500 Index, which has returned 15.1% YTD. Starbucks’s impressive first and second-quarter earnings and investor optimism surrounding its strategy of accelerating its cold beverage innovations and expanding its delivery service have contributed to a rise in the company’s stock price. Starbucks reported its second-quarter earnings of fiscal 2019 on April 25. The company outperformed analysts’ EPS and SSSG (same-store sales growth) expectations during the quarter. Starbucks’s management raised its EPS guidance for 2019 after reporting better-than-expected first-quarter earnings, which also appears to have contributed to a rise in the company’s stock price. You can read our analysis on Starbucks’s second-quarter performance at Starbucks: Key Takeaways from Its Q2 Earnings.

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McDonald’s stock performance

YTD, McDonald’s (MCD) has returned 14.5%, which fell short of the S&P Index’s return of 15.1%. On June 11, the company was trading at a discount of 1.5% from its 52-week high of $206.39, and a premium of 32.7% from its 52-week low of $153.13. The strong first-quarter performance, the implementation of digital advancements to enhance customers’ experience, and the acquisition of Dynamic Yield for $300 million on March 26 appear to have contributed to a rise in the company’s stock price. You can read our analysis on McDonald’s first-quarter performance at McDonald’s: Key Takeaways from Its Q1 Earnings.

On June 6, Nation’s Restaurant News reported that the data collected from Black Box Intelligence indicated that same-restaurant sales across restaurant brands rose 1.1% in May compared to a fall of 1.6% in April. The announcement also contributed to a rise in both Starbucks and McDonald’s stocks. 

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