Presented By Vali Lazarescu For The John Molson investment society Starbucks(SBUX)
What is Starbucks? Starbucks is the premier roaster and retailer of specialty coffee in the world. Starbucks Corporation was formed in 1985 and its common stock trades on the NASDAQ Global Select Market (“NASDAQ”) under the symbol “SBUX.” Starbucks (together with its subsidiaries, “Starbucks” or the “Company”) purchases and roasts high-quality whole bean coffees and sells them, along with fresh, rich-brewed coffees, Italian-style espresso beverages, cold blended beverages, a variety of complementary food items, a selection of premium teas, and beverage-related accessories and equipment, primarily through Company-operated retail stores. Starbucks also sells coffee and tea products and licenses its trademark through other channels such as licensed retail stores and, through certain of its licensees and equity investees, Starbucks produces and sells a variety of ready-to-drink beverages.
Starbucks Leadership Howard Schultz is the founder of Starbucks and serves as the chairman, president and chief executive officer. Mr. Schultz has served as chairman of the board since Starbucks inception in 1985 and he resumed his role as president and chief executive officer in January 2008. From June 2000 to February 2005, Mr. Schultz held the title of chief global strategist. From November 1985 to June 2000, he served as chief executive officer. From November 1985 to June 1994, Mr. Schultz also served as president.
Starbucks Segmentation Starbucks has four reportable operating segments, and each segment provided the indicated percentage of total net revenues for fiscal year 2010. Each of the segments provided the following percentage of total net revenues for fiscal year fiscal 2010: US (71%), International (21%), CPG (7%) and Other (1%).
Starbucks Store Locations
Starbucks Revenue Stream
Starbucks by Continent
Starbucks Competition Our primary competitors for coffee beverage sales are quick-service restaurants and specialty coffee shops. In almost all markets in which we do business, there are numerous competitors in the specialty coffee beverage business. We believe that our customers choose among specialty coffee retailers primarily on the basis of product quality, service and convenience, as well as price. We continue to experience direct competition from large competitors in the US quick-service restaurant sector and continue to face competition from well-established companies in many international markets and in the US ready-to-drink coffee beverage market.
Fundamentals Market Cap of 24.29 BN Sales of 10.71 BN Net Earnings of 945.60 M EPS of 1.24$ currently trading at a P/E of 26.43 Stock price=32.77 ROA=15.85% ROE=28.14% ROI=22.10% Debt/Equity=0.15 Cash of 1.164 BN P/B=6.63
Fundamental Projections EPS next Y=1.75$ (Growth of 41%) EPS this Y is up 136.17% Applying a 25 multiple for next year, stock price will be: 1.75$x25=43.75$ Return of 33.5%
SBUX Performance Performance for the Year: 43.10% Performance for the quarter: 26.62% Beta of 1.26 Consensus Target Price: 35.28$ Earnings on January 26th
Conviction Buy List Goldman Sachs conviction buy list: #1 pick. Target price of 44$ The firm also set a $44 price target on SBUX, which suggests a 38% upside to the stock's Wednesday closing price of $31.87.Read more: http://community.nasdaq.com/News/2010-12/starbucks-restarted-as-a-conviction-buy-at-goldman-sachs-sbux.aspx?storyid=49470#ixzz1AhlhkFWA