Starbucks Corporation

Analyst Listing

The following analysts provide coverage for the subject firm as of May 2016:

Broker	Analyst	Analyst Email
Cowen & Company	Andrew M. Charles	andrew.charles@cowen.com
BMO Capital Markets	Andrew Strelzik	andrew.strelzik@bmo.com
Deutsche Bank Research	Brett Levy	brett.levy@db.com
Oppenheimer	Brian Bittner	brian.bittner@opco.com
RBC Capital Markets	David Palmer	david.palmer@rbccm.com
Credit Suisse	Jason West	jason.west@credit-suisse.com
Nomura Research	Mark Kalinowski	mark.kalinowski@nomura.com
Stifel Nicolaus	Mark S. Astrachan	msastrachan@stifel.com
Evercore ISI	Matt McGinley	matt.mcginley@evercoreisi.com
Guggenheim Securities	Matthew J. Difrisco	matthew.difrisco@guggenheimpartners.com
Wedbush Securities	Nick Setyan	nick.setyan@wedbush.com
BTIG	Peter Saleh	psaleh@btig.com
William Blair	Sharon Zackfia	szackfia@williamblair.com
Stephens Inc	Will Slabaugh	will.slabaugh@stephens.com

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Primary Input Data

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Derived Input Data

Derived Input	Label	2015 Value	2016 Value	Equational Form
Net Operating Profit Less Adjusted Taxes	NOPLAT	2,251	2,532	$NOPLAT\, =\, EBIT\, x\, (1 \,-\, Avg \,\,Tax\,\, Rate\,\, on\,\, EBIT)$
Free Cash Flow	FCF	2,616	3,019	$FCF\,=NOPLAT\,+\,Non-Cash\,Expenses-\Delta NWC\,-\,NCS$
Tax Shield	TS	24	30	$TS\,=\,Interest\,\,Paid\,\,x\,\, Avg \,\,Tax\,\,Rate\,\, on\,\, Pre-Tax\,\, Income$
Invested Capital	IC	8,523	9,620	$IC\,=\,Fixed\,\,Operating\,\,Assets\,\,+\,\,Net\,\, Working\,\, Capital$
Return on Invested Capital	ROIC	26.41%	26.32%	$ROIC\,=\,\frac { NOPLAT }{ IC }$
Net Investment	NetInv	695	2,142	$NetInv\,=\,{ {IC}_{1}}-{{IC}_{0}}+Depreciation$
Investment Rate	IR	30.86%	84.62%	$IR\,=\,\frac {NetInv}{NOPLAT}$
Weighted Average Cost of Capital	WACC_Market	26.20%	21.46%	$WACC\,=\,\frac { E }{ V } { R }_{ E }\,+\,\frac { P }{ V } { R }_{ P }\,+\,\frac { D }{ V } { R }_{ D }\left( 1- Avg\,\, Tax\,\,Rate\,\,on\,\,Pre-Tax\,\,Income \right)$
Weighted Average Cost of Capital	WACC_Book	8.45%	8.29%
Enterprise value	EV_Market	89,510	81,878	$EV\,=\,Market\,\,Cap\,\,Equity\,+\,\,Long\,\,Term\,\,Debt\,-\,Cash$
Enterprise value	EV_Book	89,384	81,914
Long-Run Growth	g = IR x ROIC	8.15%	22.27%	Long-run growth rates of the income variable are used in the Continuing Value portion of the valuation models.
Long-Run Growth	g = % $\Delta$ GDP	2.50%	2.50%
Margin from Operations	M	17.56%	17.97%	$M\,\,=\,\,\frac{EBIT}{SALES}$
Depreciation/Amortization Rate	D	21.79%	21.17%	$D\,\,=\,\,\frac{D+A}{EBITDA}$

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Valuation Multiple Outcomes

The outcomes presented in this study are the result of original input data, derived data, and synthesized inputs.

Equational Form	Observed Value		Single-stage multiple g solution		Two-stage valuation model g solution
Equational Form	12/31/2015	12/31/2016	12/31/2015	12/31/2016	12/31/2015	12/31/2016
EV/SALES $\frac {EV}{Sales} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(M)$	4.54	3.78	26.18%	20.81%	26.18%	21.18%
EV/EBITDA $\frac {EV}{EBITDA} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(1\,-\,D)$	20.22	16.57	26.18%	20.81%	26.18%	21.18%
EV/NOPLAT $\frac {EV}{NOPLAT} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}$	39.77	32.34	26.18%	20.81%	26.18%	21.18%
EV/FCF_OPS $\frac {EV}{FCF_{OPS}} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)$	34.21	27.12	26.18%	20.81%	26.18%	21.18%
EV/EBIT $\frac {EV}{EBIT} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)$	25.85	21.02	26.18%	20.81%	26.18%	21.18%
EV/IC $\frac {EV}{IC} \,= \,\frac{ROIC\, -\, g}{WACC\,-\,g}$	10.50	8.51	26.18%	20.81%	26.18%	21.18%

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