Starbucks Stock Is Simply Too Hot – Yahoo Finance

Starbucks Stock Is Simply Too Hot – Yahoo Finance

I’ve been bearish on Starbucks (NASDAQ:SBUX) stock for some time now.
That skepticism looked prescient a year ago, when SBUX stock touched its lowest levels in almost three years. Since then, however, Starbucks stock has soared: SBUX at the moment trades near its all-time high.Why Starbucks (SBUX) Stock Looks Overheated at Current LevelsMoreSource: ShutterstockDespite the volatility of the stock, Starbucks’ outlook doesn’t seem to have changed all that much. Starbucks’ business is up there with McDonald’s (NYSE:MCD) as one of the best in the world.But the valuation of SBUX stock has been worrisome for a long time, and SBUX is facing meaningful risks. By placing a huge bet on China, SBUX has made a wager that looks increasingly dicey as the economy in that emerging market shows signs of slowing down. Meanwhile, the same-store sales and traffic growth of Starbucks’ U.S. .

business has slowed.InvestorPlace - Stock Market News, Stock Advice & Trading TipsWhile SBUX stock has gained a whopping 50% from its late-June lows, its risks persist. In fact, several of those risks were highlighted in the company’s first-quarter results last month that helped push Starbucks stock to its current highs. Given those concerns, and an increasingly stretched valuation, it looks like SBUX stock has run too far.Starbucks’ Q1 EarningsLooking at the headline Q1 numbers, investors could easily believe that SBUX did well. Propelled by a 4% same-store sales increase, its revenue rose 9%. Adjusted earnings per share climbed 15% year-over-year. .

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