RXI - Starbucks Is Historically Undervalued

May, 04 2022 07:45 PM iShares Global Consumer Discretionary

While there are some issues like unionization, accumulation of debt, and the reemergence of Howard Schultz, Starbucks's growth and free cash flow generation remain strong.
The macro-environment favors companies that generate cash now rather than later - Starbucks falls in the first category.
Starbucks drastically increased its long-term debt from around $3bn to more than $15bn in 2021 to repurchase more shares - but at the cost of lower margins.
A very conservative DCF analysis shows that in the mid-70s range, Starbucks's shares imply an easy ~20% upside potential.

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Company Name:	iShares Global Consumer Discretionary
Stock Symbol:	RXI
Market:	NYSE