Is Starbucks a Healthy Stock for Your Portfolio?

With shares of Starbucks (NASDAQ:SBUX) trading around $76, is SBUX an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Starbucks is a roaster, marketer, and retailer of coffee operating worldwide. The company purchases and roasts the coffees it sells along with handcrafted tea and other beverages, as well as a variety of fresh food items through its stores. Starbucks sells a variety of coffee and tea products and licenses its trademarks through other channels like stores and national food service accounts. In addition to its flagship Starbucks brand, the company’s portfolio features Tazo Tea, Seattle’s Best Coffee, Starbucks VIA Ready Brew, Starbucks Refreshers beverages, and the Verismo System by Starbucks. Starbucks has developed a solid reputation over the past several years, which has generated a lot of buzz for its products.

Starbucks wants to get in with the lunch crowd. The coffee giant announced Monday a new line of handcrafted sodas. The company said that Fizzio sodas will hit about 3,500 Starbucks stores in the southern U.S. and Hawaii starting Tuesday. That includes the Los Angeles, San Diego, Stockton, and Modesto areas, as well as in Arizona. The carbonated concoctions come in three flavors: spiced root beer, ginger ale and lemon ale, made without artificial flavors, preservatives or high-fructose corn syrup.

“We have heard from our customers that they’re looking for more refreshing, cold beverages, especially during the warm summer months,” said Cliff Burrows, president of the Americas region. The global coffee chain is also testing new sandwiches and said it will be adding more lunchtime options to compete with other chains such as Dunkin’ Donuts (NASDAQ:DNKN). Burrows said prices for the new carbonated sodas will vary by location. A medium-sized Fizzio soda will cost $2.95 in Los Angeles. By this time next year the company expects the sodas to be in every store across the country. The chain currently has about 11,600 U.S. locations. Starbucks also sells Evolution Fresh juice, La Boulange pastries and Teavana tea, and analysts say tapping into the handcrafted drink trend could be another specialty beverage win for the company.