Tim's bull case for Starbucks
He hasn't changed my mind -- how about yours? While it's true that Starbucks is as much about atmosphere as it is about coffee, why else but atmosphere would someone pay the exorbitant prices? Panera Bread
The world may not stop buying a $4 cuppa joe all of a sudden. But that pricey brew does limit the markets Starbucks can enter. It already has a ton of stores in all 50 states plus Washington, D.C. There are 71 stores in D.C. alone, and 479 more in New York City.
Vienna may be the coffee capital of the world, but that doesn't mean the citizens will fork over their hard-earned euros on overpriced coffee. The culture is very different, and what works here in the U.S. doesn't necessarily translate. The same applies to other countries as well. Europeans like familiarity, not just the latest trends.
As for valuation, spending 33 times trailing earnings is expensive, no matter which way the steam blows -- especially considering its recent growth has slowed. "Lower than in the past" does not necessarily equal "bargain."
In short, with Starbucks' slowing growth, an uncertain reception internationally, and a rich valuation all brewed together, I'll be taking my order elsewhere.
Fool contributor Larry Rothman is happy to receive feedback, and he promises to read it when he's not being wrestled by his three children. Feel free to email him at email@example.com. He doesn't have any positions in the companies mentioned. The Fool has a disclosure policy.