October 2022 Starbucks (SBUX) Stock and Rabbit Hole Dareringer Whiskey Pairing

October 2022

Authors: Mark Peters, James Hatfield, Allan Maule

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Website: starbucks.com

Twitter: @Starbucks

CEO: Howard Schultz(interim), Laxman Narasimhan takes over in April 2023

Founders: Jerry Baldwin, Zev Siegl, Gordon Bowker

Market Cap at Time of Article: $99.33B

Current Analyst Recommendations: With a current stock price of $85.57 and a median analyst target price of $97 (taken from 28 analysts), we see SBUX as a buy. Among 34 analysts, 18 gave it a "hold", 13 gave it a "buy", and 3 gave it an "outperform".

Quarterly Revenue Growth Year-Over-Year: 8.7%, which isn't bad for a company the size of Starbucks. We’d like to see higher quarterly revenue growth, but Starbucks has been a major player in the industry for decades. This makes SBUX an excellent stability asset for our portfolio.

Insiders: 0.19%, which is a frankly lousy percentage of insiders. Despite this, Starbucks is a company that has proven staying power, and its current price point makes it a solid addition to your portfolio for the long haul.

What makes Starbucks (SBUX) worth your hard-earned money for the next decade or more? SBUX, like the rest of the market, is down from the highs of last year.  Our strategy when the market is down is to find solid companies that continue to innovate.  Starbucks is that company.

Starbucks has proven that it has staying power.  The main high volume players in the franchise markets are Subway, McDonald's, and Starbucks, respectively. However, Starbucks is adding stores at a faster rate than any of its competitors. That fact alone is reason to be optimistic about the next 10 years.

Why talk about Starbucks (SBUX) to all your friends and family?

Starbucks is a household name.  While you should tell your friends and family about their plans for global expansion, it's likely that they are already familiar with the Seattle-based coffee brand.

Starbucks changed the game when they first stepped on the scene, and they have continued to innovate ever since.  For example, Starbucks rewards lets you earn "stars" towards free coffee and treats, and provide users with a treat on their birthday.  The program also allows you to order and pay ahead for prime convenience.  For those loyal customers that love accruing points, you can find Bonus Star challenges and Double Star days. With these mature reward programs in place, Starbucks isn’t going to lose locked in, longtime customers to other coffee shops.

How is this asset disruptive?

When Starbucks first stepped on the scene, they solved a problem that big coffee suppliers couldn't: deliver a quick, affordable cup of coffee that tasted great. Starbucks introduced Americans to the European experience. Flavor, quality, consistency, and what Schultz described as a "sense of theater."  Starbucks is one of the few places where you can spend three minutes or you can spend three hours, and it's just as socially acceptable.

Bythe end of 2022, Starbucks will also enter the Metaverse with Starbucks Odyssey.  Coffee lovers will be able to unlock and trade select NFTs with other users to earn rewards and earn "journey stamps."  Even more innovative, SBUX is using a web3 platform for Odyssey so that its users won't need a smart wallet. The NFTs will feature original artwork, and there will be badges that authenticate how rare a piece is.  Starbucks’s desire to be a trailblazer in this space makes the stock purchase even more appealing to this crypto nerd.

Conclusion:

Starbucks is a solid company with a proven track record and an aggressive expansion plan.  SBUX just opened its 6,000th store in China and has plans to keep expanding.  The US has proven that the method works, so now it's time to reap the rewards of global expansion.  On top of that, SBUX just announced that it would be raising its dividend payout by 8%. 1 share of Starbucks will now pay you $2.12 annually in passive income returns.  Anyone want a cup?

Whiskey Pairing: Rabbit Hole Dareringer
 Retail: $85 Proof: 93

We review this month’s whiskey pairing from the beach, during hurricane Ian, from an old house by the sea.  And yes, just came back in the house from moving a car that was deep in water, because it’s raining cats and dogs outside.

We are surrounded by a great group of friends in an old beach house and we gathered a large group around to gather tasting notes to further understand this month's whiskey pick: Rabbit Hole Dareringer.

This “small batch” bourbon is finished, not once, but twice (yes, twice) in a toasted and charred American oak barrel and then Pedro Ximenez Sherry cask—never chill filtered.  The sherry casks give this bourbon a warm dark caramel color.  We don’t talk about our whiskeys’ bottle much, but this sure is a “purdy” bottle. Honestly, it better be because this fifth is one of our more expensive selections.

We put our noses to the test and then we detect:

• Cinnamon
• Orange
• Cherry

We put our pallets to the test next and we detect:

• Black Cherry
• Liquorice
• Red lollipop
• Vanilla
• Cherry Coke

The crowd went wild and the group decided this was a top pick whiskey; giving it an overall score of 4.5.