Posts for Ticker ‘PEET’

Top 10 Analyst Upgrades, Downgrades, Initiations (AMZN, ANSS, BEBE, CAH, CNQ, CROX, GCO, PEET, O, SBUX)

These are this morning’s top 10 analyst upgrades, downgrades, and initiations seen from Wall Street research calls:

Amazon.com (NASDAQ: AMZN) Raised to Outperform at Bernstein and target raised from $125 to $160.
ANSYS (NASDAQ: ANSS) Raised to Buy at Jefferies.
bebe Stores (NASDAQ: BEBE) Cut to Hold at Brean Murray.
Cardinal Health (NYSE: CAH) Cut to Hold at Jefferies.
Canadian Natural Resources (NYSE: CNQ) Raised to Overweight at Barclays.
Crocs Inc. (NASDAQ: CROX) Reiterated Overweight at Piper Jaffray.
Genesco (NYSE: GCO) Raised to Outperform at R.W. Baird.
Peet’s Coffee & Tea (NASDAQ: PEET) Started as Buy at Janney.
Realty Income (NYSE: O) Raised to Outperform at Credit Suisse.
Starbucks (NASDAQ: SBUX) Reiterated Overweight at Piper Jaffray and raised 2010 targets.

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JON C. OGG

Posted on: November 6, 2009 – 8:29 am in Analyst Calls, , , , , , , , , ,

A Coffee Firm Merger Aimed At Starbucks (SBUX)

hersheyTwo coffee companies which sell their products online and through retailers are merging. They should be able to create a formidable competitor for Starbuck’s  retail business outside its own stores. Diedrich (NASDAQ:DDRX) will be bought by Peet’s NASDAQ:PEET) for $26 a share or $213 million. The consideration is well above Diedrich’s current price of just over $20.

Diedrich sells it single serving products and beans through restaurants, stores, and coffeehouses. Peet’s sells coffee and tea through restaurants and food services establishments and also sells coffee and tea makers. Neither firm has a chain of stores like Starbucks does, but each competes with the Starbucks branded coffees sold in grocery stores and super markets. Read More »

Posted on: November 3, 2009 – 5:40 am in Food, Mergers and Buy Outs, , , ,

Analyst Downgrade Onslaught Continues (ASML, CMG, FORM, GFIG, ICE, KLAC, MSSR, MPEL, MRG, PEET, PRXI, PHM, RGLD, JAVA, TCK, TER, UDR, VNO)

Burning_money_pic_2This morning was a shocker on just how many analyst downgrades and very negative calls were out from Wall Street analysts.  The sad part is this is only part of the onslaught that we are still seeing.

  • ASML (NASDAQ: ASML) Cut to Market Perform at FBR.
  • Chipotle (NYSE: CMG) Cut to Neutral at Piper Jaffray.
  • FormFactor (NASDAQ: FORM) Cut to Market Perform at FBR.
  • GFI Group (NASDAQ: GFIG) Cut to Hold at Deutsche Bank.
  • IntercontinentalExchange (NYSE: ICE) Cut to Hold at Deutsche Bank.
  • KLA-Tencor (NASDAQ: KLAC) Cut to Market Perform at FBR.
  • McCormick & Schmick’s (NASDAQ: MSSR) Cut to Neutral at Piper Jaffray.
  • Melco Crown (NASDAQ: MPEL) Cut to Hold at Deutsche Bank.
  • Morton’s Restaurant Group (NYSE: MRG) Cut to Neutral at Piper Jaffray.
  • Peet’s Coffee & Tea (NASDAQ: PEET) Cut to Neutral at Piper Jaffray.
  • Premier Exhibitions (NASDAQ: PRXI) Cut to Neutral at Merriman Curhan Ford.
  • Pulte Homes (NYSE: PHM) Cut to Neutral at JPMorgan.
  • Royal Gold (NASDAQ: RGLD) Cut to Sector Underperform at CIBC.
  • Sun Microsystems (NASDAQ: JAVA) Cut to Sell from Neutral at Goldman Sachs (added details).
  • Teck (NYSE: TCK) Cut to Neutral at UBS.
  • Teradyne (NYSE: TER) Cut to Market Perform at FBR.
  • UDR Inc. (NYSE: UDR) Cut to Sell at Goldman Sachs.
  • Vornado (NYSE: VNO) Cut to Neutral at Goldman Sachs.

Jon C. Ogg
January 8, 2009

Posted on: January 8, 2009 – 7:29 am in Analyst Calls, , , , , , , , , , , , , , , , , ,

Starbucks 2008 Valuation: $18, $22, or $26 (SBUX, PEET, MCD, CBOU, THI)

We wanted to run some up and down scenarios for Starbucks now that the noise from the research calls have gotten out of the way and now that the post-earnings dust has settled.  All calculations are made from its earnings release and its own guidance and we left those off to save space.

STARBUCKS TODAY & AHEAD 

At $23.00, its trailing P/E is 26.4, operating margins fell 0.3% to 11.2%; comparable sales growth for the year was 5% (only 4% for last quarter).  Starbucks had 10,684 stores in the U.S. as of September 30, 2007, and a total of 15,011 if you include international stores.  2,571 of those were opened in the last year. 

It plans to open another 2,500 net stores globally in 2008, with 900 of those owned and 700 licensed in the U.S. alone. Revenue growth is estimated at 17% to 18%.  Its 2008 diluted earnings were put at $1.02 to $1.05 (listed as 17% to 21% growth), so at $23 it has a forward P/E of 22.22 one year out. Starbucks is also launching first TV ad campaign, and that is factored into the numbers ahead.  So that means they are hoping that boost brand loyalty.

THE COMPETITIVE FIELD

Peet’s Coffee & Tea (NASDAQ:PEET) is looking for 17% to 20% in 2008 revenue growth and its forward P/E ratio for 2008 is roughly 35.  It is increasing to 15-20 new markets next year with grocery store expansion.  Unfortunately, it is only planning to expand to 30 new retail locations  in 2008.  Peet’s home and office delivery is a premium business, but unfortunately it isn’t going to be able to grow enough to make a huge difference.

The rise of McDonald’s (NYSE:MCD) has been meteoric and frankly far better than most would have guessed.  Personally, it isn’t exactly our favorite go-to coffee destination.  Maybe that isn’t fair and maybe that’s holding on top an old stereotype.

Caribou (NASDAQ:CBOU) has failed miserably in throwing up any real competition and it has not been able to draw away much traction.  Its stock is on another year low today, even though Wall Street was happy its failed CEO this week announced he’d only serve as Chairman.  It has 473 locations and its market cap is now just under $94 million.

Frankly, I can’t comment on Tim Hortons (NYSE:THI) as a competitor except for a store visit  in Canada two summers ago.  Its market cap is now $7.3 Billion and had 3,110 system-wide stores (with only 352 in the U.S.).  We also haven’t even addressed Dunkin Donuts or Krispy Kreme.  There are plenty of competitors now and the field won’t merit anymore 40 P/E coffee plays.

Frankly, I still enjoy going to Starbucks the best.  Peet’s is fine too, and Caribou is behind it.  I will continue paying my $2.12 for the Venti Bold, even if my prices have gone up without me using milk in a socialism coffee ploy. 

THE VALUATION CALCULATIONS

24/7 Wall St. covers is the stock angle. We did our own in-store review around the country stores close to us back in early 2007 because we wanted to see what the company was lacking in its store before it launched on that massive growth expansion.  The company still has a lot of room for improvement.  Starbucks will go through periods of time where it sees a rise from a trading move or from valuations compared to an oversold status.  But something is obvious as a heart attack, regardless of $18, or $22, or $26 in 2008.  Starbucks’ best days as a major growth and story stock are behind it.

A lot of this depends on the stock market performance and forward P/E’s there after the real debt and oil mess gets factored in.  If that holds steady then Starbucks may get to continue to justify a 25 P/E ratio and with that we get a $25.875 price (hence $26 rounded up).  But if the market stays sketchy then we think with the growth story contracting that this deserves a PEG ratio of roughly 1.0 and we’ll only give it a realistic forward P/E ratio of 17 or 18 ahead (and therefore $17.60 to $18.63, or $18 rounded).  If the market acts as more of a trading instrument and swings up 5% to 10% and then down 5% to 10% like we are getting used to, then today’s price of $22.00 seems like a fair pivot point.

You ought to see our beer and spirits review at 10 PM tonight.  Well, maybe not.

Jon C. Ogg
November 16, 2007

Jon Ogg produces the 24/7 Wall St. Special Situation Investing Newsletter; he does not own securities in the companies he covers.

Posted on: November 16, 2007 – 4:55 pm in Analyst Calls, Food, Product Review, Value Investing, , , , ,

Caribou Flirting With All-Time Lows On 52-Week Lows (CBOU, SBUX, PEET)

Caribou Coffee Company (NASDAQ:CBOU) is in a bit of a strange spot.  It is in the formerly-hot lounge and coffee destination.  They also have the ’sit and chill’ or ‘work on the free wi-fi’ environment that encourages spending for more than just one small cup to go.  Yet here the stock sits within flirting distance of post-IPO all time lows. 

Shares hit as low as $6.00 in July, 2006, but shares are at a 52-week low today of $6.09 and have traded as low as $6.05.  The 52-week trading range before today was $6.11 to $9.27.

Unfortunately when you go run a value scenario to compare to Starbucks (NASDAQ:PSBUX) or to Peet’s Coffee & Tea (NASDAQ:PEET), this one just stinks.  Starbucks has problems of its own that we have outlined if it wants to manage its major growth plans, and Jim Cramer just recently noted how Peet’s Coffee & Tea is a winner that can afford to go for slow growth.  There is also nothing wrong with the stores and nothing wrong with the coffee, which means that either other expenses are eating it alive or management can’t hit.  It is losing money and out of all the analysts that cover the stock none expect Caribou to be profitable for 2007 or for 2008.  That isn’t going to cut it, not one bit.

With a mere $118 million market cap, the good news is that the company trades at less than half of 2007 projected revenues.  This means that if management can figure out how to stop losing money that their valuations could actually start looking quite good.  But until they can prove it then they are just another boutique specialty coffee and food retailer that has a story they aren’t able to deliver on.   When you enter into a marketplace and can’t profitably compete against a $2.00 large cup of coffee with nothing in it, then it’s time to make some change.

Jon C. Ogg
September 7, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: September 7, 2007 – 12:20 pm in Food, , ,

Cramer’s New Caffeine Pick (PEET, SBUX)

Tonight, Jim Cramer compared Peet’s Coffee & Tea Inc. (NASDAQ:PEET) to Starbucks (NASDAQ:SBUX) as an obituary pick on CNBC’s MAD MONEY.  It wasn’t praise or criticism, just reviewing a company after the founder had passed away.  Peet’s Coffee & Tea Inc. (NASDAQ:PEET) founder Alfred Peet died last week at the age of 87, and Cramer said this caused him to review the company for an opportunity.

Cramer said that he actually thinks Peet’s is better off from an investor standpoint than Starbucks (NASDAQ:SBUX) is today.  The reason is that it has so much growth ahead that it can take a measured growth rate over the past rapid growth of Starbucks, and the forward earnings multiple and growth rates are actually better at Peet’s if you compare the Starbucks overly aggressive growth initiatives it has.  Starbucks actually learned much from Peet’s in the past.  He thinks they also have ample supplies of Coffee beans and have many more markets where they are either not in at all or have not penetrated; NO ONE can say the same about Stabucks.  In fact, Cramer said that for Starbucks to manage their growth plans they may have to hire 90,000 people to make it happen.

We gave our own product reviews of Starbucks early on in calendar Q2.  Unfortunately we saw that they have a long way to go to improve the stores they have now if they are going to run these like a factory with the breadth that they have.  Starbucks is about 10% off of its recent year-lows and the worst MAY be behind compared to that big slide down from $40.00.  But it has a lot of proving to do, and it has a long road ahead of itself if it wants to grow according to its plans.

Peet’s shares closed up 1% at $25.55 today, but shares rose almost another 3% in after-hours.  Its 52-week trading range for its stock is $22.98 to $29.17.

Jon C. Ogg
September 4, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he produces the Special Situation Investing Newsletter and he does not own securities in the companies he covers.

Posted on: September 4, 2007 – 5:50 pm in Cramer, Food, , ,