While there are plenty out there who believe that coffee giant Starbucks (SBUX) puts out terrible, overpriced, and frequently over-sugared drinks, there are plenty who make Starbucks a part of their everyday lives. Whether stopping quickly for a drink before work or spending some time there relaxing, Starbucks is on the menu. And with reports noting that one in five Americans will get a Starbucks gift card this holiday season, that means plenty of sales for Starbucks. Starbucks stock notched up fractionally on the news in Wednesday afternoon’s trading.
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Not only will Starbucks gift cards make an appearance under plenty of Christmas trees and Hanukkah presents (or rather did, being that Hanukkah is over now) out there, but also, they will be clutch in the last minute. Starbucks expects to sell fully $60 million in gift cards just on December 24. Whether gifts for co-workers, for teachers, or that elusive stocking stuffer, a Starbucks gift card generally comes in handy.
Gift cards in general are a major play at Christmas, with 43% of shoppers planning to buy at least one for the special people on their shopping lists. Total spending is expected to hit $29 billion just this year, even if it will cannibalize future sales a bit. After all, a gift card purchase is pre-paid. But given that Starbucks had $1.8 billion in unredeemed gift card sales as of September 28, sometimes it means a bit of a windfall.
A Perfect Winter Drink
Starbucks also brought out a new addition to its winter menu, specifically geared toward the season. The secret menu now features Cookies & Cream Hot Cocoa, a beverage that will ramp up your hot chocolate experience by adding the taste of Oreo cookie to it.
The beverage is available through the app, but for those whose mobile phones are not up to the task, the recipe is simple. Start with a 16-ounce Grande Hot Chocolate. Then, add four pumps of White Chocolate Mocha sauce, follow up with Cookie Crumble Topping, and add a bit of whipped cream for sheer childish glee and overkill. Then clear your calendar because the crash from that sugar rush will probably last about a week and a half.
Is Starbucks Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on SBUX stock based on 12 Buys, seven Holds and two Sells assigned in the past three months, as indicated by the graphic below. After an 8.71% loss in its share price over the past year, the average SBUX price target of $95 per share implies 12.77% upside potential.
