"I think it would certainly challenge Starbucks," says Sanchez. "If you look at what it would take in terms of what it would take out of their profits, it's anywhere from $300 million to half a billion [dollars]."
Over the last four quarters, Starbucks earned roughly $1.8 billion (excluding the effects of a $2.2 billion payout to Kraft foods over a dispute.
"Starbucks have been benefiting from continued low costs and rising margins," says Sanchez. "So, I do think that a raise to a $10 minimum wage would certainly take a bite out of Starbucks."
Talking Numbers contributor Richard Ross, Global Technical Strategist at Auerbach Grayson, disagrees that Starbucks would suffer with a higher minimum wage.
"Let's remember Starbucks [is] historically a very employee-friendly firm," says Ross. "That pro-employee stance is really the cornerstone of their success. So, I don't really think those higher wages will impact the stock."
Indeed, in the last five years, Starbucks stock is up 683%. However, since its all-time high in November 2013, the stock is down nearly 10%. According to Ross, the stock is hitting both a support level and its 200-day moving average, making it a buying opportunity.
"That potentially could be a springboard to higher prices," says Ross. "I like the stock here. I would be a buyer on the double-digit pullback to key support."
To see the rest of the discussion on what minimum wage means for Starbucks, watch the video above.