Starbucks Stock's Fall Is Not Without Reasons

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Summary

  • Coffee consumption in China is expected to soar significantly in the coming years.
  • Schultz can help the company come out of its current troubles, as he did in the past.
  • Coffee consumption in the U.S. has soared to two-decade high.

Frappuccino beverage from Starbucks Coffee

segray/iStock Unreleased via Getty Images

Investment Thesis

Starbucks is a leading brand with a wide moat. The company has sufficient ability to pass on cost increases to customers. It is facing some key challenges -- COVID-related restrictions in China, unionization efforts, CEO transition -- but the company

Bar chart store mix

Starbucks

5-year coffee prices

St. Louis Fed

Chart
Data by YCharts

This article was written by

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We provide end-to-end financial research services across asset classes. We are passionate about stocks and investments. We take pride in providing invaluable investing insights in an easy-to-understand way. .Chandan Khandelwal leads RCK, as its co-founder & CEO. He is a Chartered Accountant and Financial Consultant with more than 15 years of experience in Finance, Stock Market, Assurance and Business Advisory.

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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