Back to top

Analyst Blog

Coffee giant Starbucks Corporation (SBUX - Analyst Report) recently announced that its board of directors has authorized the repurchase of up to 25 million of its common stock. This approval is in addition to the existing 12.1 million shares available for repurchase at the end of fiscal 2012.

As of September 30, 2012, Starbucks repurchased 184 million shares worth $5.1 billion under the share repurchase program that was first authorized in September 2001.

The most recent share repurchase authorization indicates strong liquidity position of the company. Starbucks has cash and cash equivalents of $1.19 billion as of September 30, 2012. The company has been using its cash to support growth strategies and return value to its shareholders.

In this respect, it is worth noting that Starbucks raised its quarterly cash dividend by 24% (from 17 cents previously) to 21 cents in the fourth quarter of 2012. The increased dividend will be payable at the end of November 2012.

As a part of its growth strategy, Starbucks also increased its store opening target from 1200 to 1300 driven by further acceleration in China and the Asia/Pacific region.

During the fourth quarter of 2012, the company benefited from strong global same store sales, improving revenue trends in the U.S., strong growth in China and continued momentum in the Channel Development segment.  

We are encouraged by Starbucks’ strong market standing, new product launches, and rapid growth in China as well as a solid turnaround in its U.S. business.  However, poor sales in Europe due to depressed macroeconomic conditions keep us on the sidelines.

We currently have a Neutral recommendation on Starbucks, a peer of McDonald's Corp. (MCD - Analyst Report). The stock carries a Zacks #2 Rank (a short-term ‘Buy’ rating).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
CENTURY ALU… CENX 22.26 +3.25%
CITI TRENDS… CTRN 22.17 +2.97%
ILLUMINA IN… ILMN 175.23 +2.78%
ERBA DIAGNO… ERB 2.86 +2.51%
UNITED CONT… UAL 48.88 +2.51%