Greg Newman Starbucks SBUX-Q BUY ON WEAKNESS Jun 14, 2024

It reports Tuesday. Maybe buy it after the conference call. The new CEO did a great job to turn around Chipotle.

Up 18% last month after a beat. He has faith in the new CEO.

Biggest change is new CEO. Above 200-day MA since last August, now near 52-week high. Slow pandemic recovery in China. Premium of 36x forward PE, with 9% growth -- well over 3.5x PEG. Bit overbought at 80 RSI, take some profit.

They changed the CEO last summer, one of the best in fast food (did a great job at Chipotle). The CEO is improving through-put, will restore the coffee house vibe, and wants to add 10,000 locations in the US alone. You're betting on the CEO.

Going back to basics. In only 6 months, new CEO has put his stamp on the business. Should be back to double-digit growth next year. Early stages of a turnaround. Incredible franchise. Because people put $$ on their SBUX apps (to the tune of ~$3B), it's making money off this float just like a bank.

Focus includes getting orders through much faster, but creating a better and more welcoming atmosphere. So much about the retail experience today is about the vibe.

Still a core holding. Turnaround well underway with new CEO. Looking for earnings to stabilize this year, and go up 30-40% in 2026.

They report Tuesday. Expects the CEO to announce a domestic and international plan. Shares are stalled under the current CEO. He doesn't expect a breakout quarter, but will hang onto it.

It reported today and shares tanked 5.66% today. This is a buying opportunity, because the CEO turned around Chipotle. Give him time; it's only been 6 months. The average wait time is much lower, under 4 minutes, and is investing more in people and less in machines. Same-store sales are rising and sales in China are higher than the previous quarter.

200-day MA is moving up a bit, which is positive. However, the price fell below that 200-day in April (as did a lot of stocks). About 30% below March highs. Always commands a premium valuation due to brand. Fallen below 200-week MA. Paying 30x forward PE, but only 8-9% earnings growth for next 3 years. 

Recovery's been slow. Depends on consumer, especially in China. Long term, great name. Wait for better opportunity.

Stock price has done a complete round trip over the past year. Big excitement of new CEO and new initiatives. Incurred costs up front, and these things take time, but he thinks these initiatives will gain traction over the next year or two.