Starbucks Report updated August 1, 2019

Our report on Starbucks is updated and rated Weak Buy / Hold at $95.38. Normally, I would not rate a mature company like this as high as even hold give the P/E ratio of 35. But low and going lower interest rates do support high P/E ratios. And Starbucks is one of the best-known brands in the world. The company can license the brand in new countries with its partner making the investment and Starbucks simply collecting a licence fee. Also, it should report earnings growth of perhaps 15% in its next quarter due in part to a large reduction in the share count. And it may continue to buy back shares aggressively.

This stock is up a surprising 81% since it was added to this site rated Buy on August 24, 2018. Earnings growth supported some of that increase but much of it came from a large increase in the P/E multiple that the market was willing to pay. It is definitely not the “Buy” that it was last August.