Starbucks Corporation (SBUX) Plans Major Chinese Expansion by 2020


Even though there is some concern over a slowing Chinese economy, Starbucks Corporation (NASDAQ:SBUX) is said to be moving forward with a plan to massively scale up their business in the world’s most populated country. While the company already has a presense in the nation, with approximately 2,000 stores situated in 100 different cities, Starbucks Corporation (NASDAQ:SBUX) is now planning to more than double that presense. Over the next five years the company plans to open 500 new locations within China per year.

“We have confidence in the future of the Chinese economy, despite all the rhetoric, noise and issues,” said Mr. Schultz, who is visiting China this week. “People are looking for reasons not to believe. I’m on the ground and I see firsthand. I am bullish.”

Schultz told the Wall Street Journal that sometime over the next five years China will in fact be Starbucks’ (NASDAQ:SBUX) largest overall market.

Share are up $0.66 or 1.14% in pre-market trading this morning on this news. The stock increased 2.10% or $1.19 during the last trading session, hitting $57.82. About 1,350 shares traded hands. SBUX has risen 12.21% since June 8, 2015 and is uptrending. It has outperformed the S&P500 by 16.90%.

From a total of 8 analysts covering Starbucks Corporation (NASDAQ:SBUX) stock, 6 rate it a “Buy”, 0 a “Sell”, and 2 a “Hold”. This means that 75% of the ratings are positive. The highest target price is $71 while the lowest target price is $59. The mean of all analyst targets is $65.27 which is 12.88% above today’s ($57.82) stock price. Starbucks Corporation was the topic of 13 analyst reports since July 28, 2015 according to the firm StockzIntelligence Inc. BMO Capital Markets maintained shares on October 30 with a “Outperform” rating. Zacks upgraded shares to a”Hold” rating and a $59 target share price in their report from an August 24. RBC Capital Markets maintained SBUX stock in a recent report from October 30 with a “Outperform” rating. Finally, Vetr downgraded the stock to a “Buy” rating in a report they issued on a September 3.

The institutional sentiment increased to 1.24 in Q2 2015. It’s up 0.28, from 0.96 in 2015Q2. The ratio is positive, as 41 funds sold all their Starbucks Corporation shares they owned while 439 reduced their positions. 115 funds bought stakes while 482 increased their total positions. Institutions now own 941.87 million shares which is 54.43% less than the previous share count of 2.07 billion in 2015Q2.

Pacifica Capital Investments Llc holds 20.74% of its total portfolio in Starbucks Corporation, equating to 559,051 shares. R.H. Dinel Investment Counsel Inc. owns 162,300 shares representing 9.63% of their total US portfolio. Moreover, Mader & Shannon Wealth Management Inc. has 7.57% of their total portfolio invested in the company, equating to 107,008 shares. The Maryland-based Park Circle Co has a total of 7.39% of their portfolio invested in the stock. Polen Capital Management Llc, a Florida-based fund reported 6.34 million shares owned.

Since March 16, 2015, the stock had 0 buys, and 7 insider sales for a total of $83.90 million in net activity. Teruel Javier G sold 61,534 shares worth $3.38M. Shennan James G Jr sold 19,724 shares worth $1.09 million. Weatherup Craig sold 87,654 shares worth $5.05 million. Maw Scott Harlan sold 23,440 shares worth $1.33M. The insider Schultz Howard D sold 39,819 shares worth $2.36 million.

Starbucks Corporation is the roaster, marketer and retailer of specialty coffee. The company has a market cap of $84.08 billion. The Firm purchases and roasts coffees that it sells, along with coffee, tea and other beverages, and a range of fresh food items, through Company-operated stores. It has 31.73 P/E ratio. It also sells a range of coffee and tea products and licenses its trademarks through other channels, such as licensed stores, grocery and national foodservice accounts.