Motley Fool Money – "Starbucks Is Back, But Is It a Buy?"

Date: January 28, 2026
Host: Travis Hoyam
Analysts: Rachel Warren, Lou Whiteman

Episode Overview

This episode dives into Starbucks’ latest earnings report, analyzing what the data says about the company’s turnaround prospects and its valuation as an investment. The team then turns to General Motors’ results, autonomy ambitions, and aggressive buybacks before wrapping with a look at the wild movement in the metals market, specifically gold and silver. Throughout, the hosts maintain their signature straightforward, analytical Foolish tone with thoughtful skepticism.

Key Discussion Points & Insights

1. Starbucks' Earnings: Turning the Corner or Treading Water?

(00:05 – 07:28)

Performance Data and Strategies

• Mixed quarterly results: Revenue beat expectations, but profits missed.
  • Rachel Warren [00:34]: "Starbucks, it was a quarter of mixed performance ... But there was some improvement in a few key areas. We saw some signs of turnaround in consumer traffic."
• Comparable store sales:
  • Global and US: Up 4% YoY, aided by a 3% increase in traffic.
  • China: Same-store sales up 7%. Notable since China is Starbucks’ 2nd largest market and has been challenging.
• Revenue: Up 6% YoY globally.
• Company shift toward a “back to Starbucks” strategy:
  • Investing heavily in wages, labor, and technology for longer-term growth over short-term profit.
  • Transitioning Chinese operations from direct ownership to an asset-light, licensing model via joint venture with Woyu Capital, mirroring moves in EMEA.
• Expansion and shrinkage:
  • Opening 600–650 net new cafes in fiscal 2026 (owned & licensed).
  • Closing ~400 US locations post-2025.

Analyst Perspectives: Excitement or Caution?

• Lou Whiteman [02:51]: "There's nothing really to complain about in this quarter ... I struggle to see why I should be excited about this or why I should care."
  • Questions whether the pivot to asset-light international expansion might blunt Starbucks’ long-term growth narrative.
  • Notes international (China) revenue up 10% vs. North America up 3%.
  • Skeptical about whether 3%–5% revenue growth justifies current valuations.
• Valuation Concerns
  • Starbucks' price-to-earnings multiple: ~60 trailing, ~36 forward.
    • Travis Hoyam [04:48]: "Even on a forward basis, we're looking at a price earnings multiple of 36 ... If it's going to be growing at 5% ... you probably don't want to pay that kind of multiple."
• Debate: Is it a Buy?
  • Lou: "...just because you think the company's doing the right thing, that doesn't make it a winning investment." [03:46]
  • Rachel: "I would personally proceed with caution for today." [07:18]
    • Emphasizes Starbucks is sacrificing profits now for future growth, but questions remain whether the turnaround will be profitable enough for investors.
• Market Reaction
  • Stock up ~4% after the report.

Memorable Segment

• Lou Whiteman [05:18]: "I joke, but 20% of the world's global warming emissions come from Starbucks drive thrus. It feels like, I mean you get stuck in a Starbucks drive thru for 30 minutes at times and often there's..."
• Rachel Warren [06:34]: "If they don't invest in their growth story ... they're going to continue to fall behind the competition. ... I think we're maybe starting to see the very early, early signs of that. ... I would personally proceed with caution for today."

2. General Motors: Profit Over Hype

(08:12 – 14:51)

GM’s Latest Earnings

• Net income: $2.7B for FY, down from $6B prior year.
  • Driven by $3.3B Q4 net loss (mainly $7.2B in special charges for restructuring EV operations and $1.1B in China restructuring).
• Revenue: $185B for the year.
• Growth powered by traditional vehicles (trucks & SUVs), not EVs.
  • EV capacity being realigned due to lower-than-expected demand.
• Stock price response: Up ~7% on earnings day.

Comparison to Tesla – Is It Relevant?

• Lou Whiteman [10:04]:
  • Pushes back against Tesla as GM's main competition. Believes Detroit's Tesla obsession is distracting.
  • "The whole industry would be better off if they just sort of let Tesla do Tesla and focused on them."
  • GM is a steady, profitable business but "still losing to the S&P 500 over every period I can look at since the IPO."

Autonomy Ambitions

• GM announced goal for "eyes off" (Level 3) autonomy in Cadillac Escalade for 2028.
  • Will use LIDAR, radar, and cameras; evolution, not revolution.
  • Lou Whiteman [11:57]: "My favorite part ... the truck is going to glow turquoise when it's on."
  • Both Rachel and Lou see autonomy as industrywide and evolutionary; timeline differences less crucial than execution.
• GM's Cruise robotaxi team reallocated after past safety incidents.

Aggressive Buybacks

• New $6B buyback, following $10B buybacks started in late 2023.
  • Share count down 30%+ in five years.
  • Dividends consistently raised (20% increase for 2026).
  • Does this create shareholder value?
    • Lou Whiteman [14:51]: "Share count is down 30% plus ... and did I mention they're still losing to the market over that time?"
    • Rachel notes this appeals more to value investors than growth seekers.

3. Metals Mania: Gold, Silver, and the Dollar

(15:54 – 19:18)

Speculation in Gold & Silver

• Recent rallies in gold and silver compared to meme stock activity.
• Lou Whiteman [16:08]: "No." (on buying silver)
• Movement driven largely by weakening dollar, not fundamental metal demand.
  • Lou Whiteman [16:31]: "So basically what we're seeing is you are selling the dollar and looking to other places ... there's just an inverse relation here."
  • White House unconcerned about weaker dollar, which removes risk buffers and increases volatility.
• Noted that global forex is a $10T daily market; small moves can have large effects.

Retail & Institutional Flows

• Central banks and big institutions diversifying out of dollar assets.
  • Rachel Warren [18:25]: "Central banks, institutional investors have been diversifying their holdings and moving away from some of the dollar dominated assets."
• Industrial demand supports silver, but retail speculative interest also high—potential for correction.
• Gold and silver typically benefit from weaker dollar (cheaper for foreign buyers).
  • Bitcoin hasn’t mirrored the rally, undermining the old "digital gold" narrative.

Notable Quotes & Timestamps

• Rachel Warren on Starbucks [00:34]:
  “Starbucks, it was a quarter of mixed performance ... But there was some improvement in a few key areas. We saw some signs of turnaround in consumer traffic.”

• Lou Whiteman on Starbucks’ Asset-Light Shift [03:46]:
  “Just because you like the company or just because you think the company's doing the right thing, that doesn't make it a winning investment.”

• Travis Hoyam on Starbucks Valuation [04:48]:
  “Even on a forward basis, we're looking at a price earnings multiple of 36... But if it's going to be growing at 5% ... you probably don't want to pay that kind of multiple.”

• Rachel Warren cautioning investors [07:18]:
  “I would personally proceed with caution for today.”

• Lou Whiteman ridiculing drive-thru times [05:18]:
  "I joke, but 20% of the world's global warming emissions come from Starbucks drive thrus. ... you get stuck in a Starbucks drive thru for 30 minutes at times and often there's no way out too, right?"

• Lou Whiteman on GM vs. Tesla [10:04]:
  “The whole industry would be better off if they just sort of let Tesla do Tesla and focused on them.”

• Lou Whiteman on buybacks [14:51]:
  “Share count is down 30% plus over the last five years. And did I mention they're still losing to the market over that time?”

• Lou Whiteman on the dollar and metals [16:31]:
  “You are selling the dollar and looking to other places. So as one move, there's just an inverse relation here.”

• Rachel Warren on precious metal speculation [18:25]:
  “There’s been a lot of speculative interest there. So I think that's where we're seeing a lot of that meme stock like behavior. And that also means that there could be the potential for a correction.”

Timestamps for Key Segments

• Starbucks Earnings Discussion: 00:05 – 07:28
• General Motors Earnings & Autonomy: 08:12 – 14:51
• Metals Market & Dollar Weakness: 15:54 – 19:18

Tone and Takeaways

The conversation is grounded, practical, and moderately skeptical.

• Starbucks is praised for positive operational signs but questioned as an investment due to maturity, limited growth, and high valuation.
• GM is solid and stable, doing the right things strategically, but remains a laggard compared to growth benchmarks.
• Gold/Silver movements are called more dollar-driven than fundamentally justified; retail investors are warned about speculation risk.

Summary for Investors:
Starbucks appears to be “back” in terms of operations, but still not compelling as a growth stock at current prices. General Motors is executing well, focusing on stability and autonomy, but still not a market-beating investment despite buybacks. The metals market is volatile and speculative, fueled by currency movements, not lasting new fundamentals.

This summary captures the essence, analysis, and memorable moments from the episode, preserving the spirit and tone of the Motley Fool Money team.