| Company name | Starbucks Corporation |
| Stock ticker | SBUX |
| Live stock price | [stckqut]SBUX[/stckqut] |
| P/E compared to competitors | Good |
MANAGEMENT EXECUTION
| Employee productivity | Poor |
| Sales growth | Poor |
| EPS growth | Good |
| P/E growth | Good |
| EBIT growth | Good |
ANALYSIS
| Confident Investor Rating | Fair |
| Target stock price (TWCA growth scenario) | $75.83 |
| Target stock price (averages with growth) | $84.4 |
| Target stock price (averages with no growth) | $57.33 |
| Target stock price (manual assumptions) | $64.32 |
The following company description is from Reuters: https://www.reuters.com/finance/stocks/company-profile/sbux
Starbucks Corporation (Starbucks), incorporated on November 4, 1985, is a roaster, marketer, and retailer of coffee. As of October 2, 2016, the Company operated in 75 countries. The Company operates through four segments: Americas, which is inclusive of the United States, Canada, and Latin America; China/Asia Pacific (CAP); Europe, Middle East, and Africa (EMEA), and Channel Development. The Company purchases and roasts coffees that it sells, along with handcrafted coffee, tea and other beverages and a range of fresh food items, including snack offerings, through Company-operated stores. The Company also sells a range of coffee and tea products and licenses its trademarks through other channels, such as licensed stores, grocery, and foodservice accounts. In addition to its Starbucks Coffee brand, the Company sells goods and services under various brands, including Teavana, Tazo, Seattle’s Best Coffee, Evolution Fresh, La Boulange, and Ethos.
The Company’s Americas, CAP, and EMEA segments include both company-operated and licensed stores. The Americas, CAP and EMEA segments also include certain foodservice accounts, primarily in Canada, Japan, and the United Kingdom. Its Channel Development segment includes roasted whole bean and ground coffees, Tazo teas, Starbucks- and Tazo-branded single-serve products, a range of ready-to-drink beverages, such as Frappuccino, Starbucks Doubleshot and Starbucks Refreshers beverages and other branded products sold across the world through channels, such as grocery stores, warehouse clubs, specialty retailers, convenience stores and the United States foodservice accounts. Starbucks stores offer a choice of coffee and tea beverages, as well as other coffee, tea, and related products, including a range of single-serve and ready-to-drink coffee and tea products, juices and bottled water. Starbucks stores also offer an assortment of fresh food and snack offerings.
Confident Investor comments: At this time, I think that a Confident Investor can cautiously invest in Starbucks Corporation as long as the price is correct and the indicators that I describe in my book The Confident Investor are favorable. Most of the fundamentals of this company are good but there are some concerns.
If you would like to understand how to evaluate companies like I do on this site, please read my book, The Confident Investor. You can review the best companies that I have found (and I probably invest my own money in most of these companies) in my Watch List.
How was this analysis of Starbucks Corporation calculated?
For owners of my book, “The Confident Investor” I offer the following analysis (you must be logged in to this site as a book owner in order to see the following analysis). If you have registered and cannot see the balance of this article, make sure you are logged in and refresh your browser.
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In order to assist you in using the techniques of this book, the values that I used when calculating the Manual pricing above were:
- Stock price at the time of the calculation: $49.06
- Growth: 0.17
- Current EPS (TTM): $3.15
- P/E: 15
- Future EPS Calc: $6.9
- Future Stock Price Calc: $103.59
- Target stock price: $64.32
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I hope that this makes you a Confident Investor.