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Starbucks: Underperforming Shares Have Long-Term Appeal

Mar. 01, 2022 1:55 PM ETStarbucks Corporation (SBUX)20 Comments
Dan Geiman profile picture
Dan Geiman


  • Shares of Starbucks have traded down more than 20% year-to-date.
  • COVID-related costs and inflationary pressures weighed on 1Q22 earnings and shares. However, these should be transitory, and SBUX's long-term investment thesis remains intact.
  • Over the next 2 to 3 years, revenues should increase at or near the double-digit range on a combination of traffic growth, higher average ticket and unit expansion.
  • This should drive earnings to the $4.65 range in FY24 from $3.40 this year. In turn, this supports a price target of $120, suggesting a total return of about 36%.

Starbucks Retail Coffee Store. Each year, Starbucks celebrates Fall with Pumpkin Spice Lattes.

jetcityimage/iStock Editorial via Getty Images

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This article was written by

Dan Geiman profile picture
I am an investment professional with 17 years of experience as an equity analyst, including 15 years as a sell-side analyst covering the consumer sectors for Baird and McAdams Wright Ragen. I am focused on fundamental stock research with a particular interest in identifying and investing in high-quality stocks across sectors that are attractively valued based on longer-term outlooks.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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