NEW YORK (TheStreet) -- Shares of Starbucks (SBUX) were up 1.18% to $82.27 in pre-market trading on Friday after JP Morgan increased its price target on the stock to $89 from $82 and maintained its "overweight" rating.
The firm noted the duration for the stock's 15% to 20% earnings per share growth has expanded after the company's analyst day, and the stock fits JP Morgan's long-term core growth investment profile.
The first Starbucks Reserve Roastery and Tasting Room, an upscale version of the standard Starbucks establishment, opens on Pike Street in Seattle on Friday. The opening is part of Starbucks' plan to open upscale cafes in more than 100 worldwide locations in the next five years.
Separately, TheStreet Ratings team rates STARBUCKS CORP as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate STARBUCKS CORP (SBUX) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 9.5%. Since the same quarter one year prior, revenues rose by 10.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- STARBUCKS CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, STARBUCKS CORP turned its bottom line around by earning $2.71 versus -$0.01 in the prior year. This year, the market expects an improvement in earnings ($3.12 versus $2.71).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income increased by 147.7% when compared to the same quarter one year prior, rising from -$1,232.00 million to $587.80 million.
- The current debt-to-equity ratio, 0.39, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.81 is somewhat weak and could be cause for future problems.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. In comparison to other companies in the Hotels, Restaurants & Leisure industry and the overall market on the basis of return on equity, STARBUCKS CORP has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.
- You can view the full analysis from the report here: SBUX Ratings Report