Starbucks Has Jim Cramer Expecting Big Gains Once Coronavirus Clears

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There are three tiers of stocks in the current economic climate, according to Action Alerts PLUs charitable trust portfolio manager Jim Cramer.

Tier one is stocks of the companies that are still winning in the current coronavirus-impacted economy. Tier two includes stocks that will be well-positioned for big gains once the economy normalizes. Finally, there are stocks that are just wrong right now and probably will be wrong for a while even when conditions improve.

Starbucks  (SBUX) - Get Report is one of the stocks that will suffer while the market is in the eye of the coronavirus storm but will be strong and trading at a discount rate once the pandemic passes.

“Starbucks is where you want to accumulate a position in a great American company,” AAP senior analyst Jeff Marks told listeners to the monthly Action Alerts PLUS charitable trust conference call.

The reason Starbucks will be positioned well once the storm passes is that it will be able to meet the currently pent-up demand for its products.

Cramer said that the stock could double from its current position once the coronavirus pandemic passes.

"I look at this and I say, 'We're going to buy some Starbucks when we are free to do so,'” Cramer told viewers. 

Starbucks went from up 25% over the preceding 12 months to down about 20% since the coronavirus pandemic hit. It will thus have some room to run when customers are again able to more easily visit its stores.