Stephanie Link: SBUX is a buy despite weaker-than-expected Q2

Starbucks Corporation (NASDAQ: SBUX) down 30% from its record high in July 2021 is an “exciting” stock to own right now, says Hightower’s Stephanie Link.

Link explains why she likes Starbucks stock

The coffee chain might have failed to meet Street expectations in Q2 but Link believes the earnings report last night was “pretty good”. This afternoon on CNBC’s “Halftime Report”, she said:

Comps in the U.S. at 12% were super impressive, much better than expected. That speaks to the demand. I think SBUX is at an inflection point and I believe in their brand power, I believe in Howard Schultz.

Link is not too concerned about a 23% YoY decline in China – a headwind she’s convinced is temporary. At 23 times forward estimates, the portfolio manager dubs SBUX an inexpensive stock.

Other reasons to own Starbucks at current valuation

Last month, Starbucks suspended its $20 billion share repurchase programme, which, as per Stephanie Link, is another positive for the Seattle-headquartered company. She noted:

Now they have cash to actually invest in products, and people, and stores. They’re starting to do that. Then there’s a catalyst; the analyst day in September where I think Howard Schultz will talk about how there’s a lot of upside and opportunity for the company.

Starbucks’ earnings report came shortly after the union representing its baristas said Howard Schultz violated the National Labour Relations Act. Schultz took over SBUX as its interim CEO in April.