Should I Buy Starbucks (SBUX)? Finance YouTuber Analysis

The investor is holding Starbucks despite recent weakness in earnings, believing the company will recover under new leadership. He notes that while headlines suggest widespread store closures, the actual reduction in North American store count is only 1% in fiscal 2025, with growth resuming in 2026, indicating a strategic rather than catastrophic issue.

“A company that I own that is facing a setback right now is Starbucks. But I'm fully convinced that Starbucks under the leadership of Brian Nickel will make it through this period of transition and flourish into the future.”

The analyst suggests avoiding Starbucks due to its high valuation (KGV over 30, rising to 37), declining same-store sales in the US, reduced customer spending in China, and increasing raw material costs which are squeezing margins. There's also concern about the dividend's safety given current cash flow and earnings, making the risk-reward unfavorable.

“Starbucks Risiko Chanceverhältnis für mich eher ungünstig. Das heißt für mich weiterhin eher vermutlich ein Depot Leiche.”

The analyst is skeptical about Starbucks' current turnaround efforts, citing declining comparable sales and increased prices deterring customers. While a turnaround is possible, he would only consider buying if the stock drops to around $85, which would offer a more attractive 14-15% return expectation.

“selbst wenn ich bei Starbucks an Turnaround glaube dann würde ich hier eher noch ein Kauflimit setzen und gucken hoffen dass die Aktie noch mal abgibt”

The YouTuber recommends Starbucks as a buy, noting its current undervaluation and a dividend yield of nearly 2.5%, which is above its historical average. Despite recent controversies and challenges in the Chinese market, the underlying business fundamentals are strong, and the issues are considered temporary. Analyst estimates project significant annual returns.

“Starbucks ist momentan auch sehr günstig zu haben wir haben hier eine die dividendenren von knapp 2in5% was deutlich überm Schnitt der Vergangenheit liegt.”

Starbucks is presented as a potential entry opportunity due to its current valuation. Despite recent flat stock performance, the company's earnings are at an all-time high, and it offers a historically high dividend yield with dynamic growth. The analyst suggests that the stock is currently undervalued based on its historical P/E ratio and consistent growth rates, projecting an annual return expectation of 22%.

“Starbucks ist eine ist historisch bzw fundamental gesehen durchaus interessant jährliche Renditeerwartung auf die nächsten Jahre von 22%.”

The YouTuber believes Starbucks presents a good opportunity now that it has sold off. He suggests it's suitable for selling covered calls, mentioning an 87 strike as an example.

“Starbucks is a really good opportunity, I think, now that it has sold off. You can do covered calls for Starbucks. I mean, easily a covered call on Starbucks like 87 Strike.”

The YouTuber sold Starbucks after the company disappointed with a revenue decline, indicating his investment thesis was no longer valid. Although the stock recovered after a new CEO was announced, he expects it will take years for Starbucks to regain its former strength.

“Starbucks habe ich nach kürzester Zeit dann doch wieder verkauft nachdem das Unternehmen mit einem Umsatzrückgang enttäuscht hatte zum Glück wurde der neue CEO der von Chipotle gekommen ist vorgestellt und auch von den Anlegern gefeiert was den Kurs wieder auf das ursprüngliche Niveau nach oben getrieben hat ich gehe jedoch davon aus dass es einige Jahre dauern wird bis Starbucks wieder zur alten Stärke zurückfindet mein Investment Case war also nicht mehr gegeben und daher habe ich meine Anteile verkauft.”

The analyst suggests avoiding Starbucks due to significant challenges, including declining global comparable store sales and a suspension of future guidance. Despite a new CEO, the company faces existential questions about its growth trajectory and whether its past success can be replicated in a changing consumer landscape. The stock also appears expensive based on current valuation multiples, which are likely to worsen with declining profitability.

“not a company that I'm buying right now I just don't think that the Future Days for Starbucks are going to be brighter than the past were”

The analyst is watching Starbucks from the sidelines due to uncertainty about whether fundamental changes in consumer behavior (work-from-home, digital ordering, loss of 'third place' status) have permanently altered demand for its products and store model. While acknowledging the stock's low valuation and the company's history of turnarounds, he lacks a clear vision for how Starbucks will return to its historical revenue and net income growth trajectory.

“I'm watching Starbucks from the sidelines because I don't see quite enough value to think of it as a no-brainer kind of a stock and I don't see quite enough of a clear Prospect to what the solutions are to get back to revenue and net income growth.”

The YouTuber is buying Starbucks as a dividend growth stock, noting its dividend payments and growth potential. He mentions buying it around $90-$91 and setting limit buy orders for regular accumulation.

“number two stock that I've been buying guys is Starbucks a dividend play it's a dividend growth stock though it ain't just about the dividend yes they pay a nice one but they also got some growth to it”

The analyst recommends buying Starbucks if it falls below $70 per share, as it meets all five of his key investment criteria: strong revenue and EBITDA growth, robust free cash flow, low debt, and a good valuation. He projects a 12% internal rate of return over 10 years, beating the S&P 500's average 10% return, based on a detailed per-unit economic model and conservative growth forecasts.

“Starbucks is well priced at seventy dollars a share because it's currently yielding twelve percent is estimated to earn 12 annual for 10 years with a conservative growth forecast and a reasonable market multiple we think we can beat the market by owning the stock.”

The analyst suggests avoiding Starbucks at its current price of $120, as his valuation models (market multiple and free cash flow) indicate a fair value closer to $113, yielding a subpar 4% internal rate of return. He notes concerns about increased debt levels post-COVID and a moderation in growth rates leading up to the pandemic, which the market may not be fully accounting for. He would consider buying if the stock falls below $100.

“it has to fall back down to the you know less than a hundred dollars a share before i'd buy it again”