Core Insights - Starbucks stock has decreased by approximately 15% over the last year, with historical data suggesting potential for further declines, as the company has previously suffered greater losses than the overall market during downturns [1][2][3] Revenue Growth - Starbucks achieved an average revenue growth of around 4.7% over the last three years, with a slight increase of 0.6% in the past year, raising sales from $36 billion to $37 billion [3] - Recent quarterly revenue rose 3.8% year-over-year, reaching $9.5 billion compared to $9.1 billion during the same period last year [3] - However, same-store sales experienced a global decline of 2% in the most recent quarter, with North America seeing a 3% drop in transaction volumes [4] Margin Compression - Operating income for the last year was $3.8 billion, resulting in a margin of 10.5%, while net income was approximately $2.6 billion, leading to a slim margin of 7.2% [5] - Operating margins in North America have fallen from above 20% to closer to 13%, influenced by rising labor costs, increased coffee bean prices, and the "Back to Starbucks" reinvestment strategy requiring over $3 billion in spending [7] Valuation Concerns - Starbucks stock is currently priced near $83, with projections indicating a potential drop to $40, representing a 50% decline if revenue growth stagnates and margins remain compressed [2][8] - EPS is projected to decline from $3.31 in FY 2024 to $2.20 in FY 2025, before partially recovering to $2.71 in FY 2026, indicating weaker profitability compared to previous years [8] - The stock trades at high multiples of 37x forward earnings for FY 2025 and 30x for FY 2026, significantly higher than peers like Coca-Cola and McDonald's [9] Long-term Outlook - Despite current challenges, Starbucks maintains long-term recovery potential due to its global scale, premium brand, and effective loyalty program, which provide pricing power and international growth opportunities [10]

Core Insights - The article emphasizes the importance of understanding macro trends and their influence on asset prices and investor behavior [1] - It highlights the author's extensive experience in asset management, particularly in equity analysis and research [1] Group 1: Professional Background - The author has over 10 years of experience in asset management, focusing on equity analysis, macroeconomics, and risk-managed portfolio construction [1] - The professional background includes advising on and implementing multi-asset strategies, with a strong emphasis on equities and derivatives [1] Group 2: Investment Philosophy - The article promotes the idea that investing should be accessible, inspiring, and empowering for all investors [1] - It encourages collaboration among investors to build confidence in long-term investing [1]

Core Viewpoint - GE Aerospace has shown remarkable stock performance, increasing from approximately $100 in early 2024 to around $270, representing a 2.7x increase, driven by a strategic focus on aerospace, strong service business, debt reduction, and high demand for LEAP engines [2] Growth Drivers - Potential for the stock to double again to over $500, supported by several factors [3] - Significant capital investment of about $1 billion in U.S. manufacturing for 2025, nearly double last year's commitment, aimed at expanding capacity [5] - Plans to scale LEAP engine production to deliver 2,500 engines by 2028, sufficient for over 1,000 aircraft [5] - Recovery in global air travel and fleet modernization, particularly in emerging markets, is expected to sustain demand [5] - Growth in commercial services revenue, which has higher margins than original equipment, with a backlog exceeding $175 billion [5] - Technological advancements such as XA100, GE9X, and the RISE program position the company for leadership in sustainable aviation [5] - Increased global defense spending may boost military aerospace demand, with NATO members urged to increase defense budgets [5] - Operating margins have consistently expanded, currently at 19.1%, comparable to the S&P 500's 18.8% [5] Valuation Scenarios - GE's guidance suggests adjusted EPS of $8.40 by 2028, with potential to exceed $9.20 per share, up from $4.60 in 2024 [4] - Conservative scenario (P/E 30x) targets a price of $280, indicating limited upside [4] - Base case scenario (P/E 40x) targets a price of $370, reflecting about 40% upside [9] - Optimistic scenario (P/E 55x) targets a price of over $500, indicating nearly 2x upside [9] Conclusion - GE Aerospace is positioned as a compelling growth story with clear catalysts for expansion, supported by a focused strategy and strong market positions [6]

Well, let's start with these markets. As we just heard Brian mention, the S&P and NASDAQ record highs again. Some of the blue chips though, like United Health, Honeywell, IBM, those are dragging the Dow down half a percent.Our next guest says it is time to take some profits. She likes tech, but is also getting defensive with these healthcare and utilities plays. Joining us now is Emily Roland.She's the co-chief investment strategist at Manulife, John Hancock. Emily, it's good to see you. So, um, is it time ...