Can anything stop Starbucks?

The coffee chain has been making one announcement after another in the last month.

By Benzinga Apr 5, 2012 5:30PM

Image: Starbucks © Bloomberg, Getty ImagesBy Katey Stapleton, Benzinga Staff Writer


Coffee distributors far and wide are praying for Starbucks (SBUX) to hit some type of snafu. The coffee giant has steamrolled the competition in recent weeks, and analysts have scrambled to raise their ratings on the stock while lowering others.


Starbucks' stock has rallied more than 16% over the last month. Meanwhile, shares of Tim Hortons (THI) have traded roughly flat, moving up only 0.4%. McDonald's (MCD) shares have tumbled 1.9%.


The bean brewer extraordinaire has impressed its customers, the market and research firms with several positive announcements over the past month or so, not the least of which is an expansion agreement made between Starbucks and Green Mountain Coffee (GMCR).


This week, Williams Capital Group took notice.


Here's what Starbucks has done in just the last month, according to the analysts:

  • Opened the first retail location for its Evolution Fresh juice bars
  • Entered the energy drink market with the Refreshers line
  • Expanded relationship with Green Mountain Coffee Roasters to produce coffee pods for Green Mountain's upcoming Vue brewer
  • Hosted annual shareholders meeting
  • Announced the development of the Verismo single-serve machine
  • Made key strategic changes in the United Kingdom and France
  • Introduced new dessert items to be sold at retail.
"We view these events positively," Williams Capital Group analysts wrote in a research report, shortly after increasing their price target on the stock to $70 from $54.


Other analysts are stacking up Starbucks' moves against those of competitors, including McDonald's, Dunkin' Brands Group (DNKN) and Tim Hortons.


Goldman Sachs didn't hold out much hope for the competition, downgrading Tim Hortons and lowering its price target for McDonald's while upgrading Starbucks.


Goldman analysts said they still viewed Tim Hortons positively, while keeping an eye on soft traffic trends in the company's home Canadian market. "There are better restaurant investment opportunities elsewhere," the analysts said. And while Starbucks stands to benefit from the recent pullback in coffee prices, Tim Hortons would not, given its 99% franchised operating structure, the analysts added.


However, Goldman Sachs thinks Dunkin' Brands is holding strong against the competition with its dividend introduction, and more recently, its new deal to add Coca-Cola (KO) products to its stores. Dunkin' Brands will be serving Coca-Cola beverages nationwide come August.


"Coca-Cola's popular beverages such as Coca-Cola, Diet Coke, Coke Zero and Sprite will be served in more than 9,400 Dunkin' Donuts cafes and Baskin-Robbins ice cream shops across US," Zacks.com reported. "Alongside, Coca-Cola will provide a range of juices, enhanced waters and energy drinks."


Cleansing the consumer palate has become a game of who can introduce new beverages the fastest, made more competitive by the growing selection at coffee chains. One thing is for sure; caffeine lovers won't be facing a shortage any time in the near future.


Starbucks closed Thursday up 2% to $58.18, capping a spectacular 61% rise over the last year. Shares of Green Mountain closed up less than 1% Thursday to $44.09, and have fallen 32% over the last year. McDonald's shares have risen 30% in the last year to close Thursday at $98.62.


Tim Hortons fell less than 1% Thursday to close at $53.44. The stock has risen nearly 14% over the last year. And Dunkin Brands closed Thursday up 1.5% to $30.66. The stock has climbed more than 9% since its market debut in July.


More from Benzinga:
14Comments
Apr 5, 2012 10:55PM
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Yeah, drop the all day  WiFi and get rid of the squatters.  Some Starbucks are starting to look like homeless camps.
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Typical American:  No retirement savings, no savings account, 10K in CC debt, underwater mortgage, two oversized POS SUV/Pickup that cost $100 just to fill the tank, overweight, etc.  The typical American keeps this worthless company going.  $4 for a cup of coffee, get a brain transplant.

Apr 9, 2012 10:03AM
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Ever since the founder stepped back in, it has been a gold mine. It was dead money for awhile.
Apr 9, 2012 10:04AM
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Screw all you haters - I love Starbucks! 
Apr 9, 2012 10:16AM
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I don't know one person who likes Starbucks coffee better than Dunkin.
Apr 17, 2012 2:55AM
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I live in the heart of Starbucks home turf ( Seattle )

And after trying all the competitions coffee including Dunkin Donuts I would say by far the very best coffee I have ever had is Tim Hortons !

I think it is sad they do not have any stores out here in the west,

If only the people here knew what they are missing !

Apr 9, 2012 10:06AM
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Amy you gotta buy on bot. That's how I do it. Make the big ka'chings.
Apr 9, 2012 10:56AM
Apr 9, 2012 10:09AM
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Starbucks should be praised for having the balls to try new things. It deserves to do well.
Apr 9, 2012 10:05AM
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I wish starbucks would just take a hit already. They're too overpriced. 
Apr 9, 2012 10:02AM
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The coffee sucks but at least you can find a decent public restroom in Manhattan.  
Apr 9, 2012 10:49AM
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As someone who doesn't drink coffee and doesn't support Starbucks, I can't muster up the energy to care about this.
Apr 6, 2012 11:42AM
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Kinda surprising...what with the news of the "bug" coloring in drinks.
Apr 6, 2012 11:22AM
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The only coffee shop that doesn't respect the military, Starbucks suck
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