Brewed to Perfection: Evaluating Starbucks Corporation as an Undervalued Stock

SBUX: Trading below 10-yr avg with NTM P/E 21.76x vs. mean 28.71x, FCF yield 4.06% vs. mean 3.14%. Balance sheet strong with $3.38B cash, $13.6B debt, FFO coverage 12.13x, BBB+ rating. High return on capital, growing revenues 9.23% CAGR, FCF 7.65%, EPS 12.39%. Reducing shares by 24% boosted EPS 31%. Margins solid, dividends growing 16.98% CAGR. Analysts forecast EPS growth >10.88% required, with 2024-2026 YoY growth 14.8%-16.5%, implications for CAGR of 11.5%-15.4% at 21x-23x P/E multiples. At $92.50, offers a margin of safety & mid-teens compounding potential.

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