Buffett Brain · Research note
Score updated 21 Oct 2026 · analysis from 23 Sept 2026
SBUX· Consumer Discretionary
Starbucks
Starbucks' high valuation multiples, including a P/E of 63.6, overshadow its moderate moat in the competitive coffee industry.
Buffett fit
Partial fit
Owner
47
Durability
45
Management
92
Price
0
Score updated 21 Oct 2026 · analysis from 23 Sept 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Consumer Discretionary stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If we owned Starbucks entirely, the focus would be on maintaining brand strength and expanding international markets.
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Starbucks' brand provides a moderate , but competition in the coffee industry and shifts in consumer preferences are threats.
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Starbucks has been returning capital to shareholders with a 5y yield of 1.09% and a dividend yield of 2.45%.
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The current valuation is stretched with an earnings yield of 1.57% and an yield of 2.07%, far below the 8-10% threshold for a no-brainer entry.
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- The full reasoning behind all four pillars
- The 5-year price target and the return it implies
- What would change the call
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
6- 15y average of 23.02% is top-quintile in the sector.
- 2Brand recognition provides moderate .
- 3Management quality score of 92 indicates strong leadership.
- 4Consistent profitability over the last 5 years.
Concerns
6- 1 of 63.6 suggests overvaluation relative to earnings.
- 2Net debt/EBITDA of 4.85 indicates high .
- 3Negative EPS CAGR of -16.85% over the past 5 years.
- 4 of 22.77% is below sector top-quintile.
Price history
$99.37-13.3%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Starbucks operates as a roaster, marketer, and retailer of coffee with three main segments: North America, International, and Channel Development. It generates revenue through direct sales in stores, licensing its brand, and selling packaged goods. With a TTM revenue of $37.18B and a net income of $1.86B, Starbucks has a complex revenue model. The unit economics show a of 22.77%, which is below the sector top-quintile cutoff of 53.9%.
How this analysis has moved
The call has held across 5 reviews.
Sep 27, 2026 → Oct 21, 2026
What other investors would say
The same company, judged by three other documented playbooks.
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