Starbucks Corp.

Starbucks Corp. (SBUX - Analyst Report) recently rebounded from a key trend line to move back within striking range of the 52-week high at $24.45. The move higher comes on the heels of the company's better than expected Q1 results from late January.

Company Description

Starbucks Corp. owns and operates a chain of more than 8,800 coffee restaurants around the world. The company was founded in 1985 and has a market cap of $17 billion.

Shares of SBUX began falling in Nov of 2006 before finally bottoming out two years later as the company struggled with the weak economy and an aggressive expansion strategy that left the company in a vulnerable state. But since then, SBUX has initiated a number of different strategies to get back on track, on display with the company's better than expected Q1 results from January 20.

First-Quarter Results

Revenue for the period was up 4% from last year to $2.7 billion. Earnings came in ahead of the mark at 33 cents, 18% ahead of the Zacks Consensus Estimate of 28 cents. Starbucks has surprised in each of the last four quarters by an average of 4 cents, or 16%.

Starbucks saw strong growth internationally, driven by the weak Dollar, with sale up 19% from last year to $591 million. The company's balance sheet also looks strong, with $1.4 billion in cash and almost no long-term debt to speak of.

Estimates Climbing

Estimates jumped higher on the good quarter, with the current year adding 11 cents to $1.10. The next-year estimate is up 12 cents in the same period to $1.26.

Valuation

After the string of recent gains, shares of SBUX trade at a premium to the overall market with a forward P/E of 21X.

The Chart

Shares of SBUX recently rebounded from a trend line to turn back toward the 52-week high at $24.45, take a look below.

Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Surprise Trader Service.

Read the full analyst report on SBUX