The Zacks Analyst Blog Highlights: Starbucks, AT&T, Telefonica, Vodafone Group and Verizon Communications
For Immediate Release
Chicago, IL – June 25, 2013 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Starbucks Corporation (SBUX-Free Report), AT&T, Inc. (T-Free Report), Telefonica (TEF-Free Report), Vodafone Group Plc (VOD-Free Report) and Verizon Communications Inc. (VZ-Free Report).
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Here are highlights from Monday’s Analyst Blog:
Starbucks to Raise Coffee Prices
Reuters recently reported that Starbucks Corporation (SBUX-Free Report) has decided to raise the prices of some of its coffee beverages in several of its cafes in the U.S., starting this week.
The average coffee price is expected to increase by about 1% nationally. Reuters states that this would be the first price increase in some of the regions in close to two years. However, prices are not expected to go up in some markets like California and Florida.
The prices of some beverages like Grande or Venti brewed coffee, as well as Frappuccino and Refreshers are expected to remain the same. Reuters reported that the price of some of its coffee beverages, for example, a tall brewed coffee, will increase by as much as 10 cents.
It is ironical that the coffee prices are being increased at a time when the company’s profits are improving due to lower coffee costs. In the last reported quarter, the company said that its operating margins have improved due to strong sales leverage and lower coffee costs.
Last week, Starbucks announced that starting this week it will post calorie counts for its beverages and food items on its menus across all its stores in the U.S. This initiative will provide further nutritional transparency to Starbucks’ customers and will allow this Zacks Rank # 3 (Hold) company to reap benefits from evolving consumer needs for healthy and nutritious products.
AT&T to Connect with Europe
AT&T, Inc. (T-Free Report) is reportedly seeking opportunities in the European continent. According to recent Bloomberg reports, the company is in talks to buy around 29.9% in Telefonica (TEF-Free Report). AT&T is also looking to own assets in Vodafone Group Plc (VOD-Free Report) as well as digital communications company – EE, one of the largest operators in the UK and a joint venture between Deutsche Telekom AG and France Telecom S.A.
AT&T is eyeing opportunities to improve its growth profile through a number of strategic initiatives. Acquisition being one of them, has played a major role in shaping AT&T’s growth trajectory. In the domestic market, the company entered into an agreement with Verizon Wireless of Verizon Communications Inc. (VZ-Free Report) to acquire spectrum licenses. This includes 39 lower 700 megahertz (MHz) licenses, covering 42 million people in 18 states including major territories such as Chicago, Los Angeles and Miami.
AT&T also plans to buy the remaining portion of Alltel’s wireless operations including spectrum licenses, retail stores and network assets from Atlantic Tele-Networks Inc. AT&T aims to enhance its high-speed wireless network to generate more profits from the growing demand for mobile Internet services for smartphones, tablets and other devices.
AT&T is experiencing strong momentum in its wireless businesses. Continued strength in smartphone and branded computing device sales are fueling growth in the wireless sector.
The company boasts the best Internet speeds in the industry as it is the only U.S. carrier that provides 4G networks through both Long Term Evolution (:LTE) and High-Speed Packet Access Plus (HSPA+) technologies.
However, risk factors such as a saturated wireless market, persistent losses in access lines, labor union issues and aggressive pricing plans of direct competitors are likely to weigh on the company’s revenues and margins in the near to medium term.
AT&T has a Zacks Rank #3 (Hold) rating.
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
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