Do you want wine with your Frappuccino?
Well, you may soon be in luck. That’s because Starbucks announced it will sell beer and wine in thousands of stores after 4 p.m. But will the move caffeinate the stock, which has badly lagged the broader market in 2014?
(Watch: Starbucks to sell wine and beer)
“People who are addicted to Starbucks are addicted to the brand as much as the coffee,” said Gina Sanchez of Chantico Global. “I think sharing a glass of wine with a close companion in a homey Starbucks still works. I think this could be a lucrative move.”
Still, the initial shift to adding booze will take some time to roll-out and is expected to have a negligible impact on the company’s near-term bottom-line. And anyone hoping for a quick fix shouldn’t look to the charts either.
(Read: Breafast staples face surging prices)
“We broke the trend-line in September and now we see major resistance around $78, $80 bucks,” said Andy Busch of Busch Update. “I would be looking to sell at these levels.”
Still, some traders see upside in the long-term, especially given the coffee giant’s superior management.
“The biggest advantage is Howard Schultz as CEO,” said Enis Taner of riskreversal.com. “His strategic insight and attention to detail always seems to lead Starbucks in the right direction in the long run. The valuation is expensive, so I don't see big upside, but I'd rather own Starbucks than 90% of U.S. equities.”
- Investment & Company Information