Report
Valens Research

SBUX - Embedded Expectations Analysis - 2017 12 20

─ Starbucks Corporation (SBUX:USA) currently trades near historical averages relative to UAFRS-based (Uniform) Earnings, with a 28.3x UAFRS-based P/E. At these levels, the market has bullish expectations for the firm, while management has concerns about revenues, margins, and membership growth

─ Specifically, management appears concerned about the sustainability of revenue growth in their CAP region, and may lack confidence in their ability to drive margin expansion in their EMEA segment. They also appear concerned about the sustainability of membership growth
Underlying
Starbucks Corporation

Starbucks is a roaster, marketer and retailer of coffee. The company's segments are: Americas, which is inclusive of the United States, Canada, and Latin America; International, which is inclusive of China, Japan, Asia Pacific, Europe, Middle East, and Africa; and Channel Development. The company's Americas and International segments include both company-operated and licensed stores. The company's Channel Development segment includes roasted whole bean and ground coffees, Seattle's Best Coffee?, Starbucks- and Teavana-branded single-serve products, a variety of ready-to-drink beverages, and other products sold worldwide outside of the company's company-operated and licensed stores.

Provider
Valens Research
Valens Research

In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:

  • GAAP and IFRS have failed to provide rules for reliable financial statement reporting
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Many years later, our business model remains because little has changed on Wall Street.

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