SBUX is up 15% YTD as stronger customer traffic, margin recovery and higher earnings guidance fuel its turnaround, but key execution risks remain.
In the latest trading session, Starbucks (SBUX) closed at $92.29, marking a +1.69% move from the previous day.
Chipotle Mexican Grill Inc (NYSE:CMG) shares fell 4% to $30.20 as Starbucks Corp (NASDAQ:SBUX, XETRA:SRB) rose 2% to $92.13 after the coffeehouse chain ruled out a takeover of the burrito restaurant group. Starbucks said it was not buying Chipotle, ending speculation sparked by a report that it had hired advisers to explore a potential acquisition.
Takeover hopes that had been lifting Chipotle Mexican Grill (NYSE:CMG | CMG Price Prediction) shares are fading after the most logical buyer stepped aside. Chipotle stock is at $30.
Retirement-focused investors may be wondering whether to own Starbucks (NASDAQ:SBUX | SBUX Price Prediction) or Chipotle Mexican Grill (NYSE:CMG) right now? The question got harder to ignore after the Financial Times reported that Starbucks has explored a takeover of Chipotle.
SBUX has reportedly explored a Chipotle takeover, but potential growth opportunities must be weighed against financing costs, integration risks and its ongoing turnaround.
For years, Starbucks (NASDAQ: SBUX) was a growth company and a growth stock. In 2016, it had about 16,000 stores, including company-owned and franchised locations.
Starbucks (SBUX) has received quite a bit of attention from Zacks.com users lately. Therefore, it is wise to be aware of the facts that can impact the stock's prospects.
Starbucks may be eyeing a Chipotle acquisition, but before getting swept up in the excitement, consider what every previous Starbucks headline moment actually delivered to investors who bought in on the news.
Starbucks investors would likely not be happy about the company adding debt to finance a deal to buy Chipotle, given that it already has a high debt load.
Starbucks has been working with advisers on a takeover proposal of Chipotle Mexican Grill in recent months, the Financial Times reported. If the deal happens, it would combine two of the nation's largest restaurant chains.
Are the worlds of frappuccinos and guacamole colliding? If recent reporting proves out, that could be the case.