• It's Here!

    Etf Pro

    Get the big financial market moves right, bullish or bearish with Hedgeye’s ETF Pro.

  • It's Here


    Identify global risks and opportunities with essential macro intel using Hedgeye’s Market Edges.

Thank you for the feedback last week related to the revised format we're considering for the Hedgeye Hot Sheets (to be renamed Hedgeye Best Ideas). For those who have not responded, please take a moment to review the revised format of the stock report and let us know what you think. For a preview of the email, please click here.

Please send your thoughts to feedback@hedgeye.com

Starbucks is the premier roaster, marketer, and retailer of specialty coffee in the world, operating in more than 50 countries. The company sells drip brewed coffee, espresso-based hot drinks, tea, cold drinks, a variety of food items, as well as mugs and similar products.

As of October 2, 2011, there are more than 17,000 Starbucks locations across the globe, 53% company-owned. During fiscal 2011, company-operated stores accounted for 82% of total net revenues. Risk factors for Starbucks' business include costs for commodities that can only be partially hedged, such as fluid milk and high quality Arabica coffee, labor costs such as increased health care costs, and other variables beyond management's control. Trading Starbucks today, it's all about the duration.

INTERMEDIATE TERM (the next 3 months or more)

We are positive on the intermediate-term for Starbucks as the company should continue to post stable revenue growth thanks to the ongoing expansion of its CPG business, alongside other drivers mentioned above. If the US employment picture continues to improve, that would give investors further confidence in Starbucks achieving its targets.

LONG-TERM (the next 3 years or less)

The long-term TAIL for Starbucks is attractive; the company has plenty of white space to grow through several channels and geographies with ample expertise and capital to execute its strategies. The company must retain focus on the core business and, we believe that managemet is acutely aware of this following prior ('07/'08) experience.

Hedgeye Best Ideas: Starbucks (SBUX) - he bi SBUX chart

© 2013 Hedgeye Risk Management, LLC. The information contained herein is the property of Hedgeye, which reserves all rights thereto.  It is intended for the sole use of Hedgeye and its Subscribers, and redistribution of any part of this information is prohibited without the express written consent of Hedgeye.  This is presented for information purposes only and does not constitute an offer to sell, or a solicitation of an offer to buy any security.  This information is presented without regard to individual investment objectives, risk parameters or suitability.    This information is from sources believed to be reliable; Hedgeye is not responsible for errors, inaccuracies or omissions with regard to this information, or for any consequences that may arise from use of this information.  For full Terms of Use of this information, please go to www.hedgeye.com