Is Starbucks Corp. overvalued or undervalued?

As of 24 January 2019, the valuation grade for Starbucks Corp. has moved from fair to risky, indicating a shift in perception regarding its market position. Based on the current metrics, the company appears overvalued, particularly when considering its P/E ratio of 32, which is higher than the peer average of 34.81 for Starbucks itself and significantly above McDonald's P/E of 49.95. Additionally, the EV to EBITDA ratio stands at 19.36, which is lower than Chipotle's 22.24, further highlighting the relative overvaluation of Starbucks.
In terms of peer comparison, Starbucks' valuation ratios suggest it is not only facing challenges in maintaining its market position but also struggling against competitors like McDonald's and Chipotle, which have higher valuations. The recent stock performance further underscores this narrative, as Starbucks has underperformed against the S&P 500 across multiple periods, including a YTD return of -8.58% compared to the S&P 500's 12.22%. This trend reinforces the view that Starbucks is currently overvalued in the market.