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Starbucks' Stock May Fall 12% as Outlook Worsens

Michael Kramer

Shares of the coffee chain may still be too expensive, given the weak growth outlook, while also trading at a higher valuation than the S&P 500 despite growing profits at the same pace. The wheels started falling off for Starbucks when it reduced expectations for its same-store comparable sales for the fiscal third quarter to 1% from 3% in the middle of June. The earnings outlook for fiscal 2019 has been reduced by over 4% since the beginning of May, while revenue estimates have dropped by nearly 3%.