Starbucks (SBUX) Priced Just About Right At $20/Share

Starbucks (Nasdaq: SBUX) looks like it might be about fairly valued at current levels of just over $20/share. Looking at projected earnings and growth over the next 10 years, the stock might have just gone through a justified 150% run off the March lows.

During the economic peak of 2007, SBUX did pull in $0.87/share in profits, but this metric dropped to about $0.43/share last year, even as revenues continued to rise. Analysts project earnings jumping into the $.70/share range this year and resuming their march upward from there.

Given robust growth from the $0.70/share net income level for the next 8-12 years, Starbucks looks fairly valued. The one game breaker could be China. As of September of 2008, Starbucks had only 447 total stores in the country. Relative to the US, this is basically negligible.

The United States currently has 1 SBUX store for every 26,000 people while China only has 1 store for every 2.9M people!