Starbucks (SBUX) is expected to report Q2 earnings after the market close on Thursday, April 26 with a conference call scheduled for 5:00 pm ET.
Analysts are looking for EPS of 39c on revenue of $3.18B. The consensus range is 37c-43c for EPS, and $3.09B-$3.25B for revenue, according to First Call. Starbucks has announced several new programs in recent months, including initiatives to sell single-serve coffee machines and energy drinks, and offer alcohol and juice in select locations. The company also announced that it expects to open 1,500 stores in China by 2015, and significantly accelerate the pace of its expansion in that country. Investors will be looking to receive more information during the company's conference call about the pace at which the new initiatives will be launched, and how they are performing so far. Investors will also be interested in hearing about Starbucks' outlook in China, where the economy's growth has been slowing. One important tailwind for Starbucks has been coffee prices, which hit 18 month lows on April 17. Moreover, Starbucks has said that it expects coffee prices to fall further in the second half of the year. Analysts have been mostly upbeat on the coffee retailer, which hit a multi-year high of $62 of April 13, but has since declined slightly.
On April 18, Credit Suisse increased its target on the company to $67 from $56, citing lower commodity prices. The firm maintained an Outperform rating on the shares. Meanwhile, Goldman Sachs on April 4 raised the stock to Conviction Buy from Neutral. The firm expects the company to grow as a result of emerging market expansion,success in its single-serve initiative, U.S. same-store-sales increases, and a plateau in coffee costs. Goldman increased its target on the stock to $66 from $49.