Shares of Starbucks (SBUX Quick QuoteSBUX - Free Report) gained more than 1.1% in morning trading Thursday, hitting a new 52-week high in the process. The coffee giant’s stock has been a steady gainer for most of the year, but is Starbucks set to break into a new range, or should investors expect a pullback soon?

After closing at $61.89 on Wednesday afternoon, Starbucks shares gained as much 1.4% to a new 52-week high of $62.75 on Thursday morning. The stock has seemingly overcome what was a lackluster earnings report—and a weak earnings season throughout the restaurant industry—to push even higher.

Late last month, Starbuck reported adjusted earnings of 45 cents per share, which were in line with the Zacks Consensus Estimate. Quarterly sales of $5.29 billion were up 6% year-over-year, but nonetheless, these results missed our consensus estimate of $5.42 billion.

The company did report some positive trends, however. Membership in its My Starbucks Rewards program was up 11%, while mobile payments represented 29% of U.S. transactions—up from 24% in the year-ago quarter.

Global comps were up just 3%, which was a slight slowdown from the 5% comps growth it reported in the previous quarter. Starbucks said that food sales contributed 2 points to comps growth in the quarter, and it appears that its new breakfast sandwich options are seeing some popularity.

But perhaps the weakest piece of the company’s latest report was its full-year guidance. Starbucks cut its non-GAAP earnings target to a range of $2.08–$2.12 from the $2.12–$2.14 per share range that was previously announced.

As we consider whether Starbucks can break into a new range, we must consider a few key items here. First of all, SBUX has been trading in a relatively tight range over the past year. The stock hit its 52-week high of $62.75 this morning, but its 52-week low is just $50.84. In what has been a rocky retail restaurant landscape, we have certainly seen greater swings than that.

Furthermore, the ability of Starbucks to break higher will depend on the strength of consumer spending. The latest news from the Fed points to another rate hike this summer, which means the central bank is still confident about the state of the economy. Starbucks likely won’t be affected by another small rate increase, but it does stand to benefit from a continuously healthy economy.

And finally, if Starbucks wants to establish a new range, it will need to prove that its new business initiatives are paying off.  The company has doubled down on its loyalty and mobile payment platforms, and while its most recent report indicates that this is working, we still have a few other lingering questions.

Will Starbucks expand the delivery service that it’s testing out? Will customers respond well to its replacement of all artificial flavors and colors with natural alternatives? Will the new Roastery concept, which could see customers paying $10 for a premium cup of coffee, take off? (Also read: Starbucks to Open Huge Chicago Reserve Roastery in 2019)

For now, Starbucks may meet some resistance at the top of its 52-week range, but it does have several opportunities to break higher soon. This bull market has shown a reluctance to pull back on any healthy stocks. Nevertheless, SBUX remains a Zacks Rank #3 (Hold).

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