NasdaqGS:SBUX

Stock Analysis Report

Executive Summary

Starbucks Corporation, together with its subsidiaries, operates as a roaster, marketer, and retailer of specialty coffee worldwide.

Rewards

Earnings are forecast to grow 9.25% per year

Earnings grew by 22.3% over the past year

Pays a high and reliable dividend of 1.84%

Risk Analysis

High level of non-cash earnings

Has a high level of debt



Snowflake Analysis

Established dividend payer with proven track record.


Similar Companies

Share Price & News

How has Starbucks's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SBUX has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

2.0%

SBUX

2.5%

US Hospitality

1.5%

US Market


1 Year Return

26.3%

SBUX

8.1%

US Hospitality

20.1%

US Market

Return vs Industry: SBUX exceeded the US Hospitality industry which returned 8.1% over the past year.

Return vs Market: SBUX exceeded the US Market which returned 20.1% over the past year.


Shareholder returns

SBUXIndustryMarket
7 Day2.0%2.5%1.5%
30 Day-4.6%-4.9%1.4%
90 Day6.7%5.7%8.7%
1 Year28.6%26.3%10.9%8.1%22.7%20.1%
3 Year65.3%55.7%36.0%27.0%50.1%40.5%
5 Year108.5%90.8%46.2%30.6%73.1%54.1%

Price Volatility Vs. Market

How volatile is Starbucks's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Starbucks undervalued compared to its fair value and its price relative to the market?

28.91x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: SBUX ($89.28) is trading above our estimate of fair value ($74.77)

Significantly Below Fair Value: SBUX is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: SBUX is poor value based on its PE Ratio (28.9x) compared to the Hospitality industry average (24.2x).

PE vs Market: SBUX is poor value based on its PE Ratio (28.9x) compared to the US market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: SBUX is poor value based on its PEG Ratio (3.1x)


Price to Book Ratio

PB vs Industry: SBUX has negative assets, so we can't compare its PB Ratio to the US Hospitality industry average.


Next Steps

Future Growth

How is Starbucks forecast to perform in the next 1 to 3 years based on estimates from 28 analysts?

9.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SBUX's forecast earnings growth (9.2% per year) is above the savings rate (1.7%).

Earnings vs Market: SBUX's earnings (9.2% per year) are forecast to grow slower than the US market (14.5% per year).

High Growth Earnings: SBUX's earnings are forecast to grow, but not significantly.

Revenue vs Market: SBUX's revenue (7.5% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: SBUX's revenue (7.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if SBUX's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Starbucks performed over the past 5 years?

9.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SBUX has a high level of non-cash earnings.

Growing Profit Margin: SBUX's current net profit margins (13.8%) are higher than last year (12%).


Past Earnings Growth Analysis

Earnings Trend: SBUX's earnings have grown by 9.5% per year over the past 5 years.

Accelerating Growth: SBUX's earnings growth over the past year (22.3%) exceeds its 5-year average (9.5% per year).

Earnings vs Industry: SBUX earnings growth over the past year (22.3%) exceeded the Hospitality industry -9.8%.


Return on Equity

High ROE: SBUX's liabilities exceed its assets, so it is difficult to calculate its Return on Equity.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Starbucks's financial position?


Financial Position Analysis

Short Term Liabilities: SBUX has negative shareholder equity, which is a more serious situation than short term assets not covering short term liabilities.

Long Term Liabilities: SBUX has negative shareholder equity, which is a more serious situation than short term assets not covering long term liabilities.


Debt to Equity History and Analysis

Debt Level: SBUX has negative shareholder equity, which is a more serious situation than a high debt level.

Reducing Debt: SBUX's has negative shareholder equity, so we do not need to check if its debt has reduced over time.

Debt Coverage: SBUX's debt is well covered by operating cash flow (38.7%).

Interest Coverage: SBUX's interest payments on its debt are well covered by EBIT (15.3x coverage).


Balance Sheet

Inventory Level: SBUX has a high level of physical assets or inventory.

Debt Coverage by Assets: SBUX has negative shareholder equity (liabilities exceed assets) therefore debt is not covered by short term assets.


Next Steps

Dividend

What is Starbucks's current dividend yield, its reliability and sustainability?

1.84%

Current Dividend Yield


Dividend Yield vs Market

company1.8%marketbottom25%1.4%markettop25%3.7%industryaverage3.0%forecastin3Years2.0%

Current dividend yield vs market & industry

Notable Dividend: SBUX's dividend (1.84%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: SBUX's dividend (1.84%) is low compared to the top 25% of dividend payers in the US market (3.69%).


Stability and Growth of Payments

Stable Dividend: SBUX's dividends per share have been stable in the past 10 years.

Growing Dividend: SBUX's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (49.9%), SBUX's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SBUX's dividends in 3 years are forecast to be covered by earnings (53.3% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.4yrs

Average management tenure


CEO

Kevin Johnson (58yo)

2.8yrs

Tenure

US$19,241,950

Compensation

Mr. Kevin R. Johnson has been the Chief Executive Officer of Starbucks Corp since April 3, 2017 and has been its President since March 1, 2015. He has been a Director of Starbucks Corp since March 2009 and ...


CEO Compensation Analysis

Compensation vs Market: Kevin's total compensation ($USD19.24M) is above average for companies of similar size in the US market ($USD10.81M).

Compensation vs Earnings: Kevin's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Kevin Johnson
CEO, President & Director2.8yrsUS$19.24m0.015% $15.3m
Patrick Grismer
CFO & Executive VP1.3yrsUS$11.21m0.010% $10.8m
Rosalind Brewer
COO, Group President of Americas & Director2.9yrsUS$8.02m0.0035% $3.7m
John Culver
Group President of International13.1yrsUS$6.74m0.022% $23.4m
Lucy Helm
Executive VP & Chief Partner Officer2.5yrsUS$4.21m0.0065% $6.8m
Howard Schultz
Founder & Chairman Emeritus1.7yrsUS$30.18m3.05% $3.2b
Jill Walker
Senior VP of Corporate Financial Services & Chief Accounting Officer0.9yrsno data0.0032% $3.4m
Gerri Martin-Flickinger
Executive VP & CTO4.3yrsno datano data
Rachel Gonzalez
Executive VP1.8yrsno data0.00087% $911.7k
Ashish Mishra
Senior VP1.1yrsno datano data

2.4yrs

Average Tenure

57yo

Average Age

Experienced Management: SBUX's management team is considered experienced (2.4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Kevin Johnson
CEO, President & Director2.8yrsUS$19.24m0.015% $15.3m
Rosalind Brewer
COO, Group President of Americas & Director2.9yrsUS$8.02m0.0035% $3.7m
Howard Schultz
Founder & Chairman Emeritus1.7yrsUS$30.18m3.05% $3.2b
Belinda Wong
Chairman & CEO of Starbucks China0.7yrsno datano data
Myron Ullman
Independent Chairman of the Board1.7yrsUS$452.82k0.0012% $1.2m
Javier Garcia Teruel Herroz
Independent Director14.4yrsUS$267.80k0.0086% $9.0m
Mellody Hobson
Independent Vice Chairman of the Board1.7yrsUS$369.97k0.048% $50.3m
Mary Dillon
Independent Director4.1yrsUS$287.86kno data
Jørgen Knudstorp
Independent Director2.9yrsUS$287.86k0.0015% $1.6m
Joshua Ramo
Independent Director8.8yrsUS$269.97k0.0011% $1.1m

2.9yrs

Average Tenure

58yo

Average Age

Experienced Board: SBUX's board of directors are not considered experienced ( 2.9 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Starbucks Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Starbucks Corporation
  • Ticker: SBUX
  • Exchange: NasdaqGS
  • Founded: 1971
  • Industry: Restaurants
  • Sector: Consumer Services
  • Market Cap: US$104.788b
  • Shares outstanding: 1.17b
  • Website: https://www.starbucks.com

Number of Employees


Location

  • Starbucks Corporation
  • 2401 Utah Avenue South
  • Seattle
  • Washington
  • 98134
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SBUXNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDJun 1992
SRBDB (Deutsche Boerse AG)YesCommon StockDEEURJun 1992
SBUX *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJun 1992
SRBXTRA (XETRA Trading Platform)YesCommon StockDEEURJun 1992
SBUXSNSE (Santiago Stock Exchange)YesCommon StockCLUSDJun 1992
SBUXSWX (SIX Swiss Exchange)YesCommon StockCHCHFJun 1992
SBUXBVL (Bolsa de Valores de Lima)YesCommon StockPEUSDJun 1992
SBUXBIT (Borsa Italiana)YesCommon StockITEURJun 1992
SBUXWBAG (Wiener Boerse AG)YesCommon StockATEURJun 1992
US_SBUXKAS (Kazakhstan Stock Exchange)YesCommon StockKZKZTJun 1992
SBUXBASE (Buenos Aires Stock Exchange)CEDEAR EACH REPR 1 ORD COM USD0.001ARARSMay 2004
SBUB34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REP 1 COM USD0.001BRBRLAug 2012

Biography

Starbucks Corporation, together with its subsidiaries, operates as a roaster, marketer, and retailer of specialty coffee worldwide. The company operates in three segments: Americas; International; and Channel Development. Its stores offer coffee and tea beverages, roasted whole bean and ground coffees, single-serve and ready-to-drink beverages, and iced tea; 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. It offers its products under the Starbucks, Teavana, Seattle’s Best Coffee, Evolution Fresh, Ethos, Starbucks Reserve, and Princi brand names. As of October 30, 2019, the company operated approximately 31,000 stores. Starbucks Corporation was founded in 1971 and is based in Seattle, Washington. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/17 00:03
End of Day Share Price2020/02/14 00:00
Earnings2019/12/29
Annual Earnings2019/09/29


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.