Coffee distributors far and wide are praying for Starbucks
) to hit some type of snafu, as the coffee giant has noticeably
dominated the market in recent weeks, forcing analysts to raise
its rating/estimates and lower those of the competition.
Within the last month, Starbucks stock has rallied 16.69%.
Meanwhile, shares of Tim Hortons have traded roughly flat, moving
up only 0.4%. McDonalds has actually dropped, as shares have
On the heels of an
made between Starbucks and Green Mountain Coffee (NASDAQ:
), the bean brewer extraordinaire has impressed its customers,
the market and research firms with several positive announcements
over the past month or so.
Today, Williams Capital Group took notice.
"On March 19th Starbucks opened their first retail locations
for Evolution Fresh and Seattle's Best Coffee. Two days later,
Starbucks entered the Ready-to-drink energy drink market,
expanded their relationship with Green Mountain Coffee Roasters
(GMCR - $48.18, Perform/Hold), and hosted their annual
shareholders meeting, all on the same day. They also announced
the development of the Verismo single-serve machine, made key
strategic changes in the UK and France, and introduced new
dessert items to be sold at retail. All these events occurred
within the last three weeks. We view these events positively,"
Williams Capital Group commented in a research report, shortly
after increasing its PT on SBUX from $54 to $70.
Others seem to be taking notice to the many new attractions
Starbucks has to offer, such as McDonald's (NYSE:
), Dunkin' Brands Group (NASDAQ:
) and Tim Hortons (NYSE:
Goldman Sachs participated in grinding up the companies that
are pitted against Starbucks, as it downgraded
PT in the same report that it upgraded
"We downgrade THI shares to Neutral from Buy. We still view
the company in a positive light, and the primary reason for the
ratings change is our view that currently, there are better
Restaurant investment opportunities elsewhere. However, we are
mindful of recent soft traffic trends in the company's home
Canadian market as it is unclear if these trends are transient or
driven by fundamental issues such as increased competition or
impending saturation. Furthermore, unlike SBUX, THI would see
almost no benefit from falling coffee prices given its 99%
franchised operating structure," Goldman Sachs explained.
However, Goldman Sachs did set aside an individual report for
Dunkin' Brands, which is holding strong against the competition
with its dividend introduction, and more recently, its freshly
announced deal with The Coca-Cola Company (NYSE:
Zacks Equity Research,
Dunkin' Brands will be serving Coca-Cola beverages in stores
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.
Alongside, Coca-Cola will provide a range of juices, enhanced
waters and energy drinks," Zacks.com reported.
Cleansing the consumer palate has become a game of who can
introduce new beverages the fastest, made more competitive by the
many products coffee chains are beginning to offer. One thing is
for sure; caffeine lovers won't be facing a shortage any time in
the near future.
SBUX is currently trading at $57.23, up +55.92% YoY. GMCR is
currently trading at $43.81, down -34.06% YoY. MCD is currently
trading at $98.46, up +28.89% YoY. THI is currently trading at
$53.88, up +16.4% YoY. DNKN is currently trading at $30.02, up
+7.76% YoY. KO is currently trading at $73.52, up +8.63% YoY.
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