Starbucks Shares Look Attractive
The stage is set for compelling top-line growth and margin expansion for years to come, writes Morningstar’s R.J. Hottovy.
We walked away from
We retain our $64 fair value estimate, and we believe today's pullback may be an attractive entry point for longer-horizon investors. As Starbucks rolls out its MOP and other digital platforms, enhances its food offerings, and introduces a wider offering of consumer packaged-food initiatives across new geographies in the years to come, we believe it sets the stage for compelling top-line growth and margin expansion in the consumer discretionary space and gives us confidence in our 10-year forecast, which calls for average annual top-line growth of 10% and operating margins approaching the mid-20s.
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