As of August 20, 2025, Starbucks Corp's estimated intrinsic value ranges from $44.18 to $132.55 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $132.55 | +45.8% |
| Discounted Cash Flow (5Y) | $104.08 | +14.5% |
| Dividend Discount Model (Multi-Stage) | $93.62 | +3.0% |
| Dividend Discount Model (Stable) | $44.18 | -51.4% |
| Earnings Power Value | $47.28 | -48.0% |
Is Starbucks Corp (SBUX) undervalued or overvalued?
With the current market price at $90.93, the stock appears to be fairly valued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Starbucks Corp's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.72 | 0.75 |
| Cost of equity | 7.2% | 9.1% |
| Cost of debt | 4.0% | 4.9% |
| Tax rate | 22.1% | 22.9% |
| Debt/Equity ratio | 0.15 | 0.15 |
| After-tax WACC | 6.7% | 8.4% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $104 | $131,456M | 83.4% |
| 10-Year Growth | $133 | $163,822M | 69.7% |
| 5-Year EBITDA | $129 | $159,623M | 86.3% |
| 10-Year EBITDA | $157 | $191,168M | 74.0% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $4,960M |
| Discount Rate (WACC) | 8.4% - 6.7% |
| Enterprise Value | $59,213M - $74,561M |
| Net Debt | $13,146M |
| Equity Value | $46,066M - $61,415M |
| Outstanding Shares | 1,137M |
| Fair Value | $41 - $54 |
| Selected Fair Value | $47.28 |
| Metric | Value |
|---|---|
| Market Capitalization | $103360M |
| Enterprise Value | $116507M |
| Trailing P/E | 39.26 |
| Forward P/E | 23.75 |
| Trailing EV/EBITDA | 16.40 |
| Current Dividend Yield | 264.51% |
| Dividend Growth Rate (5Y) | 7.67% |
| Debt-to-Equity Ratio | 0.15 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $39.77 |
| Discounted Cash Flow (5Y) | 25% | $26.02 |
| Dividend Discount Model (Multi-Stage) | 20% | $18.72 |
| Dividend Discount Model (Stable) | 15% | $6.63 |
| Earnings Power Value | 10% | $4.73 |
| Weighted Average | 100% | $95.86 |
Based on our comprehensive valuation analysis, Starbucks Corp's intrinsic value is $95.86, which is approximately 5.4% above the current market price of $90.93.
Key investment considerations:
Given these factors, we believe Starbucks Corp is currently fairly valued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.