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We Just Can’t Justify Starbucks’ Lofty Valuation, Even After Its Great Quarter

publication date: Jul 27, 2019
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Image Shown: The red dot signifies where shares of SBUX are trading at as of midday trading on July 26. Shares of Starbucks are trading well above the top end of our Fair Value Range. We just can’t see a way to justify its current lofty valuation other than, to quote Alan Greenspan, irrational exuberance.

While Starbucks has a promising growth trajectory ahead of it, we see its valuation as stretched after updating our model. The top end of our fair value estimate range stands at $89/share, well below where SBUX is trading at as of this writing.

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