Starbucks posted a 34% rise in Q3 profits, when it reported its earnings after the bell yesterday. The coffee giant earned $279.1 million or $0.36 per share on revenue of $2.93 billion. The company saw international revenue surge 20% compared with a 9% rise in U.S. operations. It also raised its full-year guidance and expects to earn $1.50 to $1.51 per share, up from $1.46 to $1.48. So it’s no surprise that analysts are bullish on the stock:
- UBS analysts believe Starbucks’ K-cups could be crucial to boosting its earnings. Profit growth from K-cups will continue into 2013 once they are introduced in Starbucks stores.
- The company has a healthy cash flow that could allow the company to boost acquisitions, increased dividends, or allow for share repurchases, according to UBS analysts.
- Credit Suisse analysts are concerned about high coffee prices and think K-cup guidance is below their expectations but continued progress in profits from its U.S. operations offsets both.
- Deutsche Bank expects Starbucks’ retail store growth to be strong, and continue at double the pace of its global peers.
- Barclays sees tremendous opportunities for the company through consumer products goods (CPG).