Starbucks Corporation (NASDAQ: SBUX) is in the green this morning after the multinational chain of coffeehouses raised its long-term guidance and outlined a reinvention plan.
What Starbucks expects for the future
15% to 20% growth in EPS (annually) over the next three yearsExpand Starbucks Rewards and link it to external loyalty programmes7.0% to 9.0% annual increase in Global and U.S. same-store salesReinstate share buybacks at the start of the next financial yearOpen 2,000 new stores in the U.S. between fiscal 2023 and 2025
Starbucks also said it will invest roughly $450 million in cafes to boost efficiency. On CNBC’s “Squawk on the Street”, Jim Cramer said:
They’re reinvesting the company. A rational approach is to take the money, pay employees a little more, and figure out how to make stores faster and then proceed.
Last month, Starbucks reported market-beating results for its fiscal third quarter.
Should you buy Starbucks stock?
Also on Wednesday, J.P. Morgan recommended that you buy Starbucks stock as it has upside to $100 a share – about a 15% increase from its previous close.
The update arrives more than a week after the Nasdaq-listed firm named Laxman Narasimhan its new Chief Executive. Cramer added:
You need someone who’s an international figure and has turned around companies, who understands that you can take companies that are doing poorly and turn them around within two years. So, I think it’s a very exciting choice.
Starbucks also expects China and not the United States to be its biggest market by 2025. The stock is currently down more than 20% for the year.
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