High Growth, High Valuation At Starbucks (SBUX)

Wow. The management team at Starbucks does not seem wedded to the public disclosure policy of “promise low, deliver high.”

At an investor’s conference in New York today, Starbucks unveiled very ambitious five-year plans for their investors.

They called for: 10% annual revenue growth, 15-20% earnings per share growth, and 5-8% same store sales growth.

It anticipates high revenue growth from its plans to open 5,000 stores in China between now and 2021, and it foresees extremely high earnings growth of nearly 20% because the coffee giant sees a total market of 1,000 “Reserve” locations across the United States where it can generate obscene profit margins by selling $10 coffee.

The catch is that everyone in the investor community is aware that Starbucks has grown earnings by 17% annually over the past ten years and continues on its present pace. At its current market cap of $85 billion, Starbucks (SBUX) Read the rest of this article!