Wells Fargo on Starbucks (SBUX); Topping The Nielsen Research Chart Again, At Green Mountains' (GMCR) Expense

July 9, 2012 12:58 PM EDT Send to a Friend
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Price: $75.81 +1.30%

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    25 Buy, 4 Hold, 1 Sell

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Wells Fargo maintains a 'Market Perform' on Starbucks (NASDAQ: SBUX) price target range $51-$53.

Analyst, Bonnie Herzog, commented on a new AOC Nielsen Data Release which showed the K-Cups' share of ground coffee category lost a little ground over a four week period (ending June 9). Dollar penetration was 21.1% compared to 21.5% last period. However K-cups outpaced the category as a whole, with dollar sales up 114.3% year-over-year vs. category 15.1%. Starbucks reached another record high of 16.1% (vs. 15.7% last month) and SBUX's unit price was $3 more. Herzog believes SBUX K-Cup share gains are largely at the expense of Green Mountain (Nasdaq: GMCR) brands.

Despite the continued favorable data reports, Herzog maintains a 'Market Perform' on SBUX, citing 2012 as a transitional year for SBUX and believe the stock is fairly valued. She continues to review three key areas of execution including: 1) Strong U.S. same-store sales; 2) International expansion; and 3) Building consumer packaged goods business.

For an analyst ratings summary and ratings history on Starbucks click here. For more ratings news on Starbucks click here.

Shares of Starbucks closed at $51.97 yesterday.


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