(SBUX) Starbucks Corporation – Analysts Further Increase Estimates

January 25th, 2010

Starbucks Corp. (SBUX) just crushed Wall Street’s expectation by setting record earnings.

Starbucks just reported record quarterly earnings on Jan 20. The coffee giant saw net revenues rise 4% to $2.7 billion. The increase was on slightly higher traffic and higher average ticket prices.

In addition the company managed to almost double its operating margin, which increased 620 bps to 13.6%. Earnings per share came in at 33 cents, beating the Zacks Consensus Estimate by a nickel.

Analysts React

Despite raising estimates just before the report, analysts further increased estimates following the announcement. As of Friday, Jan 22, we saw 7 upward revisions for fiscal 2010, raising the consensus 7 cents to $1.07.

Twelve Starbucks analysts increased forecasts for fiscal 2011, bumping the consensus to $1.23, from $1.15. Projected growth rates are now 24% for this year and 15% for the next.

The Chart

Shares of SBUX set a new 52-week high on the recent surprise, but quickly retreated as the market sold off. Right now shares are bout 20 times forward earnings.

A chart for Starbucks Corp

Bill Wilton is the Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Growth Trader service

Zacks Investment Research

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