SBUX - Embedded Expectations Analysis - 2021 06 24
Starbucks Corporation (SBUX:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings, with a 41.0x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, and management is confident about driving beverage innovation, their drive-through channel, and expanding Starbucks Now to WeChatSpecifically, management is confident they are reconnecting with their customers, they drive relevant beverage innovation, and that they already completed 70% of their strategic store closures. Furthermore, they are confident they saw a slight improvement in their drive-through out-the-window times and that expanding Starbucks Now to WeChat enabled customers in China to place orders via the app of their choice. Management is also confident customer mobility in China improved as pandemic-related restrictions subsided late in the quarter, sales in their two lead growth markets have recovered to pre-pandemic levels, and their Channel Development revenue was driven by Global Coffee Alliance transition-related activities. Moreover, they are confident their Q2 results amplify the impressive momentum over the past year and that they have real-time protocols in place to
ensure the health and safety of their customers and partners
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.
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
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.