Cool Beans for Starbucks Investors
For Howard Shultz and his maiden backers, the Starbucks story has been the American Dream. This stock is red hot, and now a “fully sensorial coffee environment” has shareholders, old and new, dreaming even bigger.
The company’s gone from a small, packed-in cafe in Seattle, to now a record-breaking Roastery in Chicago’s classiest neighborhood. The concept of a “third place” between home and work has taken off, with new Starbucks cafes sprouting up across the US. Starbucks offers consumers a more up-scale cuppa, and now the chain is reinvesting its profits into new technology, a successful rewards program, and “a new store per day” in China.
Prospects in the Asian region give investors reason to think that huge stock gains could continue. Though, that assumes CEO Kevin Johnson can realize that potential. He recently replaced legendary former CEO Howard Shultz at the helm, while the Starbucks founder stares through White House windows from the outside.
Some investors are waiting for the stock to cool down a bit before taking a sip, having seen shares almost boil over the rational since 2018. Aside from Costa in Europe, Dunkin’ Donuts at home, and Luckin’ Coffee in China, the main competitor to Starbucks is still a home coffee machine. Its baristas can’t expect much business during the recession that investors are predicting either. Fast-food chains like MacDonald’s have set their sights on brewing a cheaper drink for the masses, and so far they’re on target.
So, while we’re all “addicted” to coffee, that addiction could easily be cured by a downturn. Investors still believe in Starbucks over the long-term but are focused on the fundamentals right now, and won’t let a ritzy new Roastery pull the wool over their eyes! Big bucks in SBUX?
