Starbucks (SBUX) is a Sure Buy Today

Quarantine showed us what restaurant stocks are most resilient when push comes to shove. Starbucks Corp. (NASDAQ: SBUX) dominated the “fast-casual” world, adapting seamlessly to mobile ordering and touch-free service.

Starbucks stock rebounded almost instantly from the big market-wide drop in March. It’s up 70% year over year.

But even as the pandemic winds down, these convenient delivery methods aren’t going away. In fact, some companies got so good at it, they really don’t need to bring diners back inside their restaurants. People enjoy the grab-and-go method of picking up their coffee.

That means any extra in-person diners will be icing on the cake for Starbucks. They’re coming. And that will continue driving Starbucks stock to new highs this year.

Here’s why you should look into buying Starbucks stock today.

Starbucks Leads the “Great Reopening”

Money Morning’s options trading specialist, Tom Gentile, is excited about the restaurant industry. He has several picks that performed well under quarantine and will continue to thrive when they open their doors.

For example, Chipotle Mexican Grill Inc. (NYSE: CMG) and Darden Restaurants Inc. (NYSE: DRI), parent of Olive Garden, each had their own steady journeys to all-time highs recently.

Neither of them can do the numbers quite like Starbucks, however.

Starbucks is world’s largest coffee house chain. It reached an all-time high of $111 in the past few days, nearly double where it was at the bottom of last year’s bear market. That’s a strong performance for a product that most people can make at home while wearing sweatpants.

Clearly, there is something more to Starbucks than just a fix of coffee in the morning.

People still leave their houses to pick up a Grande Mocha, even if they order it via the app on their phone. That’s customer loyalty, and it is priceless to a company.

The café aspect of meeting with a friend was squashed during the pandemic. But that didn’t stop Starbucks’ loyalty program from growing by 2.5 million to 21.8 million for the U.S. and by 50% to 15.4 million in China.

Now that coffee meet-ups are likely coming back, the stock could see another massive boost.

There’s a good chance you already knew Starbucks was a well-oiled machine. If that’s not enough to own the stock, its technicals should seal the deal.

The Technical Case for Starbucks Stock

Technically, the stock checks several bullish boxes, not the least of which is a series of all-time highs in 2021.

Even after what appeared to be a technical breakdown in late January, the stock was quite resilient and quickly returned to new high ground.

In technical analysis, failed bearish breaks are considered bullish because sellers failed to jump on the opportunity. That means demand for shares is strong.

Wall Street agrees, with upgrades from BMP Capital and Wells Fargo. BMP marked the Starbucks stock as a “reopening beneficiary,” and Wells Fargo is maintaining its “overweight” stance on the stock, saying it could hit $120 in the next year.

Tom predicted back in October that this stock would soar past the $100 mark. It did that with flying colors, right now sitting at all-time highs.

If the company wasn’t already a universal coffee behemoth, Its latest move has been providing an app to help visually impaired customers make their orders.

The global reach of Starbucks is hard to match. Its fundamentals are solid, and its technical performance bodes well for the future.

Demand for coffee didn’t go away during the pandemic; it isn’t going away now. And Starbucks has proven a master at adapting the delivery to meet that demand wherever it might be.

That makes Starbucks a sure buy today. Expect another steady rise for the stock over the next year.

— Money Morning Staff

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Source: Money Morning