Opinions
The Weekly Buzzing Stocks by Billy Kawasaki
Starbucks
SBUX-Q
TOP PICK
Oct 31, 2024
Stock price when the opinion was issued
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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.
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.
Starbucks Corporation, together with its subsidiaries, operates as a roaster, marketer, and retailer of specialty coffee worldwide. The company operates through three segments: North America, International, and Channel Development. Its stores offer coffee and tea beverages, roasted whole beans and ground coffees, single serve products, and ready-to-drink beverages; and various food products, such as pastries, breakfast sandwiches, and lunch items. The company also licenses its trademarks through licensed stores, and grocery and foodservice accounts. The company offers its products under the Starbucks, Teavana, Seattle's Best Coffee, Evolution Fresh, Ethos, Starbucks Reserve, and Princi brands. As of October 3, 2021, it operated 16,826 company-operated and licensed stores in North America; and 17,007 company-operated and licensed stores internationally. The company was founded in 1971 and is based in Seattle, Washington. Social media mentions are up 167% in the past 24h.