SIGN OF THE CULTURE – AT 12:22 P.M. ET:   Starbucks rising.  From the Financial Times: 

Starbucks has already established itself as the undisputed king of retail coffee chains. Now one Wall Street analyst thinks it can overtake McDonald’s as the world’s most valuable restaurant chain.

The Seattle-based coffee chain’s shares fell 7.5 per cent last year, as investors warily eyed a deceleration in same-store sales from the first half to the second. The announcement last month that long-serving chief executive Howard Schultz would step down — although stay as executive chairman — didn’t help.

However, the drop in the stock could make it that much more attractive to investors as it aims to maintain its steady growth in the coming year, according to Nomura analyst Mark Kalinowski, who picked Starbucks as his top large-cap US-based restaurant stock pick for this year.

Starbucks will expand its worldwide store count by more than 8 per cent for the fiscal year ending in September, according to Mr Kalinowski, and grow worldwide same-store sales by about 5 per cent. As its presence grows, Starbucks could see revenue expand in double-digits, and earnings per share increase 12 per cent, he added.

The chain’s headwinds include “consistent same-store sales, unit growth potential and ongoing innovation”, Mr Kalinowski noted. It also benefits from a lack of direct head-on competition, as a beverage-first chain that also sells food, as opposed to more food-focused chains.

COMMENT:  Whoever wins, it's a story of American ingenuity.  Whoever heard of Starbucks when we were growing up?

January 4, 2016