Baseman lowers Starbucks (SBUX) to Hold.
Comments
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COVID gutted the need for downtown office presence. Rioters make urban locations unattractive. China, well fuck that shit. It's also cheaper to drink coffee at home.Baseman said:Despite the compelling long term story of growth, Starbucks' recent uptick stretches their valuation to a forward P/E north of 30. Starbuck announced they will incur higher restructuring charges reconfiguring their stores to focus on walk-up and drive-thru traffic originated from its mobile app. Expect Cap-ex to impact earnings through the end of 2021. Plus, who can afford fancy coffee in this economy.
And fuck Howard Schulz with a redhot poker. Fuck that motherfucker.
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How much can cap ex be to do what they've been doing, which is basically nothing. A few plexi-glass barriers at the counter, some circular "stand here" stickers on the ground, and that's it.Baseman said:Despite the compelling long term story of growth, Starbucks' recent uptick stretches their valuation to a forward P/E north of 30. Starbuck announced they will incur higher restructuring charges reconfiguring their stores to focus on walk-up and drive-thru traffic originated from its mobile app. Expect Cap-ex to impact earnings through the end of 2021. Plus, who can afford fancy coffee in this economy.
They've cut way back on their labor costs and people are starting to hit Starbucks again hard. Everytime I go, the line-up for the drive through is around the fucking block. It is something people can treat themselves to w/o exposure to the crud.
Starbucks will continue to thrive for the same reason it always has: it's an affordable luxury. The coffee at a Cuban bakery in Miami is 20X better and 100X cheaper than the swill they serve at Starbucks. For that reason, my father said Starbucks would never catch on in Miami. Of course, he was dead wrong. -
$1.7 Billion the last 12 months. Down from almost $2B for their fiscal 2019 ending 9/2019. Now factor in closing stores, retro fitting existing stores or adding walk in sites, you're still looking at a high capex run rate without adding new stores.creepycoug said:
How much can cap ex be to do what they've been doing, which is basically nothing. A few plexi-glass barriers at the counter, some circular "stand here" stickers on the ground, and that's it.Baseman said:Despite the compelling long term story of growth, Starbucks' recent uptick stretches their valuation to a forward P/E north of 30. Starbuck announced they will incur higher restructuring charges reconfiguring their stores to focus on walk-up and drive-thru traffic originated from its mobile app. Expect Cap-ex to impact earnings through the end of 2021. Plus, who can afford fancy coffee in this economy.
They've cut way back on their labor costs and people are starting to hit Starbucks again hard. Everytime I go, the line-up for the drive through is around the fucking block. It is something people can treat themselves to w/o exposure to the crud.
Starbucks will continue to thrive for the same reason it always has: it's an affordable luxury. The coffee at a Cuban bakery in Miami is 20X better and 100X cheaper than the swill they serve at Starbucks. For that reason, my father said Starbucks would never catch on in Miami. Of course, he was dead wrong.
I love the stock, just not at this price. I'm not selling. Waiting for a more attractive entry point. -
I did my UW Business Strategy project on Starbucks back in the early 2000s ...
Back then, it was all about the in store ambiance/community and coffee ... all you had to do was check out the U-Village SBUX in QFC at midnight to see the “brand”
At the time though they barely had drive thru’s or much of a food lineup ... which were my primary recommendations (expand the number you can serve and for those that embrace the community you keep them on-site)
SBUX will continue to evolve their offerings as society changes and will do fine ... it’s a stock that I never imagine looking at in a portfolio and hating -
Core --never sell-- holding for me.Tequilla said:I did my UW Business Strategy project on Starbucks back in the early 2000s ...
Back then, it was all about the in store ambiance/community and coffee ... all you had to do was check out the U-Village SBUX in QFC at midnight to see the “brand”
At the time though they barely had drive thru’s or much of a food lineup ... which were my primary recommendations (expand the number you can serve and for those that embrace the community you keep them on-site)
SBUX will continue to evolve their offerings as society changes and will do fine ... it’s a stock that I never imagine looking at in a portfolio and hating -
From 1950 thru 2010 everyone (including myself) would have said the same about Phillip Morris about never selling and been 1000% right.Baseman said:
Core --never sell-- holding for me.Tequilla said:I did my UW Business Strategy project on Starbucks back in the early 2000s ...
Back then, it was all about the in store ambiance/community and coffee ... all you had to do was check out the U-Village SBUX in QFC at midnight to see the “brand”
At the time though they barely had drive thru’s or much of a food lineup ... which were my primary recommendations (expand the number you can serve and for those that embrace the community you keep them on-site)
SBUX will continue to evolve their offerings as society changes and will do fine ... it’s a stock that I never imagine looking at in a portfolio and hating
Espresso's are the new smokes (American's guilty pleasure minus the death).
All it takes is enough studies showing there is a correltion between a faster death rate/other underlying medical issues and drinking them daily and it's gameover for them, and then that justified sky high valuation craters.
And overseas won't save them. I thought that would be Phillip Morris saving grace as people over there don't get the option of not using personal responsibilty as a reason to sue, but that still hasn't stopped the decline in cig sales.
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If, and when, the US outlaws coffee advertising, as they did with cigarettes 50 years ago (40 years before 2010), I'll reconsider my Starbucks holdings.godawgst said:
From 1950 thru 2010 everyone (including myself) would have said the same about Phillip Morris about never selling and been 1000% right.Baseman said:
Core --never sell-- holding for me.Tequilla said:I did my UW Business Strategy project on Starbucks back in the early 2000s ...
Back then, it was all about the in store ambiance/community and coffee ... all you had to do was check out the U-Village SBUX in QFC at midnight to see the “brand”
At the time though they barely had drive thru’s or much of a food lineup ... which were my primary recommendations (expand the number you can serve and for those that embrace the community you keep them on-site)
SBUX will continue to evolve their offerings as society changes and will do fine ... it’s a stock that I never imagine looking at in a portfolio and hating
Espresso's are the new smokes (American's guilty pleasure minus the death).
All it takes is enough studies showing there is a correltion between a faster death rate/other underlying medical issues and drinking them daily and it's gameover for them, and then that justified sky high valuation craters.
And overseas won't save them. I thought that would be Phillip Morris saving grace as people over there don't get the option of not using personal responsibilty as a reason to sue, but that still hasn't stopped the decline in cig sales. -
Starbucks sells a legal highly addictive drug
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Need to listen to the next earnings call. Some analyst will ask them to peel back the onion on that number. Store closures makes sense. But they are doing smoking bidness right now with stores mostly 'as is'.Baseman said:
$1.7 Billion the last 12 months. Down from almost $2B for their fiscal 2019 ending 9/2019. Now factor in closing stores, retro fitting existing stores or adding walk in sites, you're still looking at a high capex run rate without adding new stores.creepycoug said:
How much can cap ex be to do what they've been doing, which is basically nothing. A few plexi-glass barriers at the counter, some circular "stand here" stickers on the ground, and that's it.Baseman said:Despite the compelling long term story of growth, Starbucks' recent uptick stretches their valuation to a forward P/E north of 30. Starbuck announced they will incur higher restructuring charges reconfiguring their stores to focus on walk-up and drive-thru traffic originated from its mobile app. Expect Cap-ex to impact earnings through the end of 2021. Plus, who can afford fancy coffee in this economy.
They've cut way back on their labor costs and people are starting to hit Starbucks again hard. Everytime I go, the line-up for the drive through is around the fucking block. It is something people can treat themselves to w/o exposure to the crud.
Starbucks will continue to thrive for the same reason it always has: it's an affordable luxury. The coffee at a Cuban bakery in Miami is 20X better and 100X cheaper than the swill they serve at Starbucks. For that reason, my father said Starbucks would never catch on in Miami. Of course, he was dead wrong.
I love the stock, just not at this price. I'm not selling. Waiting for a more attractive entry point. -
I suppose anything is possible, but we've? been drinking coffee for a really, really, really long tim and we've been drinking a lot of it. That scenario seems unlikely.
