☕ Cup Of Coffee?

Starbucks’ upbeat long-term outlook is precisely the double espresso shot pandemic—weary investors and analysts needed

Hey Global Investor, here’s what you need to know before the US markets open.

Market Snapshot 📈

S&P 500 (Thursday Close) 3,668.10 −4.72 (0.13%)

NASDAQ (Thursday Close) 12,405.81 +66.86 (0.54%)

FTSE 100 (5 PM IST) 6524.40 -75.36 (1.14%)

NIFTY 50 (Today’s Close) 13,513.85 +35.55 (0.26%)

USDINR (5 PM IST) 73.76 (1 Year +4.24%)

☕ Cup Of Coffee? (No, Not The Garbage Song!)

Starbucks’ upbeat long-term outlook is precisely the double espresso shot pandemic—weary investors and analysts needed.

Background: Starbucks is synonymous with coffee and social responsibility. During the pandemic, not surprisingly, Starbucks saw a drop in footfall in its stores. However, orders coming in through the app and drive-thru pickups shot up. The company is adapting to changing conditions and remains committed to its “growth at scale” agenda. Unwavering in its commitment to values, Starbucks took a stand against online hate speech and paused advertising on social media platforms.

What Happened? In the most recent quarter, Starbucks reported $6.2B in revenue. For FY21, the company stood by its EPS estimate of ~$2.90, and estimating a 20% growth in FY22. Longer-term growth targets beginning in 2023 are expected to be in the 10% range. The company expects strong demand for coffee by 2022. Cold beverages brought more than $1B in sales over the past three years.

In line with this expectation, Starbucks will continue its international expansion plans. It aims to add 1,050 new stores outside the Americas, 600 of which will be in China.

In the US, the company is accelerating changes by closing down 800 underperforming stores and building new ones with an emphasis on drive-thru and no seating. Taking a cue from the increased demand for cold drinks, the company will add Iced Shaken Espresso and Oatmilk to its list of offerings by spring.

Starbucks is also a reopening play that should benefit greatly in the post-Covid world. This fact, coupled with the company’s future outlook was enough to cheer analysts and investors alike with regard to its long-term prospects.

Market Reaction: SBUX is up 20% YTD. On Thursday, the stock closed at $105.39, up 4.97%.

Company Snapshot 📈

SBUX $105.39 +4.99 (+4.97%)

Analyst Rating (34 Ratings) BUY 44%  HOLD 56%  SELL 0%

Newsworthy 📰

  • Get the Vaccine: Medical experts vote in favor of FDA authorization of BioNTech/Pfizer COVID-19 vaccine candidate (PFE -0.29%, BNTX +5.48%)
  • Streaming Growth: Disney+ has nearly 87 million subscribers, and expects to reach 230 million to 260 million by 2024 (DIS +0.17%,)
  • Getting Electric: Nio joins Tesla and other rivals in rush to offer more shares in electric-vehicle companies (NIO +2.75%)

Later Today 🕒

  • 7.00 PM IST: Producer price index (final demand)
  • 8.30 PM IST: Consumer sentiment index
  • Before Market Opens: Johnson Outdoors Inc Earnings (JOUT)

Fun Fact of The Day 🌞

The Study of Flags Is Called Vexillology

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