Just because something can be recycled does not mean it always is. It does not even mean it often is in quite a few cases, as coffee giant Starbucks (SBUX) recently discovered. Starbucks’ cold beverage cups are intended to be recycled, but comparatively few actually do. That news did Starbucks few favors, and shares slid almost 2% in Thursday afternoon’s trading.
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A group known as Beyond Plastics, which advocates against what it calls “plastic pollution,” tracked cold cups from Starbucks using Bluetooth-enabled trackers attached to the cups. The group discovered that 30% of the cups tracked ended up in a landfill. Another bloc went to an incinerator, while almost as many hit a waste transfer station. Another bloc nearly as big were “still in transit,” while a comparatively tiny batch were found in “material recovery facilities.”
The study only examined 53 cups, and 10 of these were likely damaged sufficiently to suggest they were still at the store. But still, for an item that reports note can be used in curbside recycling efforts at over 60% of United States households, the outcome falls somewhat short of expectations. It will likely not do Starbucks many favors with its target market, either.
Thinking Twice
Seattle may be about to get a bit more hospitable for Starbucks, based on reports that Mayor Katie Wilson is walking back some earlier remarks about the coffee chain. Wilson, a “democratic socialist” elected as part of a labor-backed platform, recently revealed that her earlier comments were “not productive.”
Wilson’s modest retraction comes as local business leaders are registering concern about the business environment in Seattle, and whether comments like Wilson’s could ultimately drive other businesses away. As Starbucks pursues a combination of layoffs and relocation, it seems that the process may have started. But Wilson may be about to turn some of it around, if the trend continues.
Is Starbucks Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on SBUX stock based on 17 Buys, 11 Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 26.83% rally in its share price over the past year, the average SBUX price target of $110.88 per share implies 6.64% upside potential.
