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.
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They also lost .46 a share last quarter and the consensus estimate for next quarter is .30, $2.50 FYE 2021. Too rich for me at the moment.creepycoug said:
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.
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That would be general consenus, but if America is going to have socialized medicine, you can bet there is going to be people/groups wanting constraints on unhealthy choices (booze, fast food, junk food, soda).creepycoug said: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.
Think of New York limiting size of pop drink cups at Convience Store. -
Actually they sell two. Sugar being the other.RaceBannon said:Starbucks sells a legal highly addictive drug
At some point its going to get into the mainstream that sugar = cancer. But that's another conversation. I imagine it would be pretty easy for sbux to transition to a stevia or the like.
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I hope the company’s stock crashes! You have no idea the damage fancy coffee did to the UW football program!
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Okay sure this makes sense if that were true... but it’s not as of today, and there’s no basis for expecting that to happen.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. -
Any man getting starbucks for himself is gay as fuck all
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Green tee Frappuccino with whip creamPitchfork51 said:Any man getting starbucks for himself is gay as fuck all
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Capex has little impact on EPS btw. Will be back to $3+ in EPS shortly and competition decimated (how’s your little corner barista going to do through all this?).
Should be trading at $90+ in this market. Quality restaurants stocks always trade at a high multiple (check out CMG) -
Wrong. Cash flow from operations - Capex = Free Cash FlowSonnyShackelford said:Capex has little impact on EPS btw. Will be back to $3+ in EPS shortly and competition decimated (how’s your little corner barista going to do through all this?).
Should be trading at $90+ in this market. Quality restaurants stocks always trade at a high multiple (check out CMG)
Free Cash Flow - Dividends = $ for growth or stock buybacks.
Starbucks won't cut their divided and stock Buybacks has has been a major driver of Starbucks EPS growth.
With downward pressure from decreased sales and projected capex increases for reconfiguring existing stores and closures, EPS growth will suffer for the foreseeable future.
HTH
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Like Starbucks, CMG should be a core long term holding but is currently way overvalued at 52 times forward 2021 earnings. I added to my position in March and own at an average cost basis of $400 (17 times 2021 earnings) At a projected 5yr EPS growth of 15%, its a HoldSonnyShackelford said:Capex has little impact on EPS btw. Will be back to $3+ in EPS shortly and competition decimated (how’s your little corner barista going to do through all this?).
Should be trading at $90+ in this market. Quality restaurants stocks always trade at a high multiple (check out CMG) -
You’re conflating the P&L and cash flow. I wasn’t talking about FCF. And capex is a good thing and drives most of the growth. Buybacks help over time too but they only add ~2% or so per year to growth.Baseman said:
Wrong. Cash flow from operations - Capex = Free Cash FlowSonnyShackelford said:Capex has little impact on EPS btw. Will be back to $3+ in EPS shortly and competition decimated (how’s your little corner barista going to do through all this?).
Should be trading at $90+ in this market. Quality restaurants stocks always trade at a high multiple (check out CMG)
Free Cash Flow - Dividends = $ for growth or stock buybacks.
Starbucks won't cut their divided and stock Buybacks has has been a major driver of Starbucks EPS growth.
With downward pressure from decreased sales and projected capex increases for reconfiguring existing stores and closures, EPS growth will suffer for the foreseeable future.
HTH
Those investments in on-the-go are more than maintenance capex. Some is going to unit growth too.
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el oh el if you are using fundamental analysis in this market. Enjoy your 3% upside this year. Buy FAANG and TSLA, profit.
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I'm already up on Apple, Amazon, Google, and Chipotle. Sounds like things are different now. Pretty sure I've seen this movie before.Sources said:el oh el if you are using fundamental analysis in this market. Enjoy your 3% upside this year. Buy FAANG and TSLA, profit.
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There's definitely a correction coming, but I'd rather be way up and lose 30% than flat and lose 40%. Either way, I'm completely cash outside of 401k ETFs and a few TSLA options, and likely will stay that way until the election endsBaseman said:
I'm already up on Apple, Amazon, Google, and Chipotle. Sounds like things are different now. Pretty sure I've seen this movie before.Sources said:el oh el if you are using fundamental analysis in this market. Enjoy your 3% upside this year. Buy FAANG and TSLA, profit.
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Starbucks near term Capex will do little to drive revenue. It's more about long term consumer demand. People aren't going to sit in Starbucks Cafes anymore. It's pickup your drink and go. Sales and profit are way down and it's not going to change in the near term. Last year Starbucks bought back 11.6% of their shares (not the 2% you claimed) and they still earned .30 less than the year before.SonnyShackelford said:
You’re conflating the P&L and cash flow. I wasn’t talking about FCF. And capex is a good thing and drives most of the growth. Buybacks help over time too but they only add ~2% or so per year to growth.Baseman said:
Wrong. Cash flow from operations - Capex = Free Cash FlowSonnyShackelford said:Capex has little impact on EPS btw. Will be back to $3+ in EPS shortly and competition decimated (how’s your little corner barista going to do through all this?).
Should be trading at $90+ in this market. Quality restaurants stocks always trade at a high multiple (check out CMG)
Free Cash Flow - Dividends = $ for growth or stock buybacks.
Starbucks won't cut their divided and stock Buybacks has has been a major driver of Starbucks EPS growth.
With downward pressure from decreased sales and projected capex increases for reconfiguring existing stores and closures, EPS growth will suffer for the foreseeable future.
HTH
Those investments in on-the-go are more than maintenance capex. Some is going to unit growth too.
Revenue run rate is trending $4 Billion below last year (down 15%) The stock currently trades at 29x forward earnings. It was a screaming buy @ $50 earlier this year. I wouldn't pay more than $60 right now. There are better opportunities. -
We lucky fucking big brother step up and backstopped the whole thabSources said:el oh el if you are using fundamental analysis in this market. Enjoy your 3% upside this year. Buy FAANG and TSLA, profit.
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Sources said:
el oh el if you are using fundamental analysis in this market. Enjoy your 3% upside this year. Buy MANGINA, profit.
We've gone over this already -
1 -"Buy FAANG and TSLA, profit."Sources said:
There's definitely a correction coming, but I'd rather be way up and lose 30% than flat and lose 40%. Either way, I'm completely cash outside of 401k ETFs and a few TSLA options, and likely will stay that way until the election endsBaseman said:
I'm already up on Apple, Amazon, Google, and Chipotle. Sounds like things are different now. Pretty sure I've seen this movie before.Sources said:el oh el if you are using fundamental analysis in this market. Enjoy your 3% upside this year. Buy FAANG and TSLA, profit.
2 - "There's definitely a correction coming, but I'd rather be way up and lose 30% than flat and lose 40%. Either way, I'm completely cash outside of 401k ETFs and a few TSLA options, and likely will stay that way until the election ends"
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Admittedly some contradiction there, but I should clarify that it's a matter of horizon. I tend to invest short term, which is why I'm avoiding going long on anything outside of what looks opportunistic (e.g., TSLA). For the majority of folks, buying shares of the big techs will, in the long run, far outperform the rest of the market. FAANG is also much more correction-proof in part because of the confidence people have in those companies as well as the fact that these companies have business models that don't require people in officesBaseman said:
1 -"Buy FAANG and TSLA, profit."Sources said:
There's definitely a correction coming, but I'd rather be way up and lose 30% than flat and lose 40%. Either way, I'm completely cash outside of 401k ETFs and a few TSLA options, and likely will stay that way until the election endsBaseman said:
I'm already up on Apple, Amazon, Google, and Chipotle. Sounds like things are different now. Pretty sure I've seen this movie before.Sources said:el oh el if you are using fundamental analysis in this market. Enjoy your 3% upside this year. Buy FAANG and TSLA, profit.
2 - "There's definitely a correction coming, but I'd rather be way up and lose 30% than flat and lose 40%. Either way, I'm completely cash outside of 401k ETFs and a few TSLA options, and likely will stay that way until the election ends" -
Agree, although I'm wary of Netflix going forwardSources said:
buying shares of the big techs will, in the long run, far outperform the rest of the market.Baseman said:
1 -"Buy FAANG and TSLA, profit."Sources said:
There's definitely a correction coming, but I'd rather be way up and lose 30% than flat and lose 40%. Either way, I'm completely cash outside of 401k ETFs and a few TSLA options, and likely will stay that way until the election endsBaseman said:
I'm already up on Apple, Amazon, Google, and Chipotle. Sounds like things are different now. Pretty sure I've seen this movie before.Sources said:el oh el if you are using fundamental analysis in this market. Enjoy your 3% upside this year. Buy FAANG and TSLA, profit.
2 - "There's definitely a correction coming, but I'd rather be way up and lose 30% than flat and lose 40%. Either way, I'm completely cash outside of 401k ETFs and a few TSLA options, and likely will stay that way until the election ends"
