- Starbucks stock is facing headwinds on growth concerns.
- Starbucks continues to generate healthy economic profits.
- Analysts price target indicates more than 17% upside in stock price.
Yesterday, on August 29th, the Seattle based US coffee chain house,
The same happened with Starbucks stock, which was down 4.5%, after the company posted a good second quarter earnings, but showed a slowdown in US same store sales. Starbucks stock has since recovered most of its losses. While there might be some growth concerns, the long term growth story is still good with
Starbucks Profits Are Healthy
Starbucks has managed to grow its profits over the last five years while maintaining healthy margins. Net income has grown from $940 million in 2010 to $2.76 billion in 2016, a CAGR of 24%. Starbucks operating margin(ttm) currently stands at a healthy 19% while net margin is at 13%. In the latest quarter, while revenue saw a slight slowdown...