Starbucks Corp

Stock: SBUX

Rating: Good

Author: Waleed M. Tariq

Summary

  • Starbucks stock has a 10-year return slightly above the S&P 500.
  • This excellent, low-volatility company’s 25% YTD stock price drop offers investors a great entry point.
  • Starbucks offers moderate value growth for those seeking reliable growth equities.

Bullish

  • Long-term growth and development initiatives enhance Starbucks stock.
  • Company incentives boost customer loyalty. Double-digit MRQ increase for this consumer base.
  • Starbucks’ distinctive products and great marketing have attracted a vast customer base.

Bearish

  • Due to unionization issues in the U.S., corporation shares are decreasing.

Expansion and Development

  • Starbucks’ popularity has led to long-term success. SBUX’s 80% ACSI score shows loyalty programs keep customers loyal.
Statista
  • North America has half the company’s 34,000 stores and greatest sales. MRQ sales climbed 23% YoY and 120% abroad. 50/50 company-owned/franchised.
Starbucks
  • The company’s net revenue reached $8.1 billion by Q1 2022, up 19% YoY due to store growth and a recovering economy.
Statista
  • With 484 new locations in Q1, the company is on track to reach its 2022 objective.
Starbucks

Valuation

  • 23.63 TTM PE and 0.04 PEG. The company’s forward PE of 26.87 and ahead PEG of 2.30 signal price growth. Lower share prices and PE multiples boost investor returns.

ROI

  • With a 3-year historical levered FCF margin of 49.46%, the company’s dividend growth should continue.
  • The company will purchase back $20 billion in shares over the next three years. MRQ made $4 billion.

Conclusion

  • The stock is balanced and benefits risk-averse and conservative portfolios. Current prices make SBUX a great long-term investment.