Starbucks K-cups are helping drive results
Strong early acceptance of Starbucks K-cups will lead to a strong fiscal first quarter performance for the coffee retailer and roaster, according to UBS.� They consider the stock a buy and raised their price target to $52, from $47 previously.
Starbucks has been a solid performer over the last couple of quarters, beating estimates on strong growth across its different business units. The trend will continue in the first quarter, according to UBS, with U.S. same store sales expected to grow 9%.
Among the best performing units, though, has been the fast growing consumer products group.� CPG, as the unit is called, recently released Starbucks brand K-cups, which are single-serve coffee capsules for Green Mountain Coffee�s Keurig brewers.
Strong early acceptance of Starbucks K-cups leads UBS� analysts to note �the future of the high margin CPG division appears bright;� the product has already grabbed about 12% market share in the K-cup space. �CPG had grown 20% year-over-year last quarter and is set for another strong run, with analysts forecasting 40% growth in fiscal Q1. Along with K-cups, Starbucks� bagged coffee and blonde roast will further drive the unit, which could add more than 10 cents to fiscal 2012 EPS.
The analysts expect 2012 revenues to grow 13% to $13.2 billion.� They have raised their fiscal 2012 and 2013 estimates to $1.89 and $2.40, which constitute 24% and 27% year-over-year growth respectively.
Starbucks remains a top performer in its sector, its stock up 47% over the last twelve months.� That�s better than competitors Dunkin� Brands (down 6% since it went public in late July) and fast food chains McDonald�s and Yum Brands (up 36% and 24% respectively).
On Thursday, shares in Starbucks traded in positive territory, closing the ! day up 1 % or 48 cents to $47.60 in New York.
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