Starbucks continues to attract investors' attention, but views remain mixed between hope and fear. Here's how it breaks down:
5 Reasons Investors Remain Bullish
1. Dominant Brand Recognition: Starbucks remains the global coffee leader.
2. Turnaround Strategy: The "Back to Starbucks" strategy with CEO Brian Niccol is working already.
3. Digital Engagement: 34.6 million active U.S. Rewards members drive loyalty and sales growth.
4. Store Expansion Plans: Ambitious expansion globally, with 40,576 stores in Q1 FY25.
5. Strong Stock Performance: 9% increase in 2025 against falling general market trends.
4 Reasons Bearish Sentiment
1. Falling Sales: Global comparable stores sales fell by 4% in Q1 FY25.
2. High P/E ratio: 33.68 Current P/E is a cause of concern over its high value.
3. Challenges in China: Tough competition and slow recovery in large markets like China.
4. Regulatory Hazards: Labour and environmental legislation can impact profitability.
Source: Investopedia, Trefis