The PT is 35x their CY08 EPS estimate of $1.20 (+23 pct Y/Y) and 38x their FY08E EPS of $1.11 (+22 pct Y/Y).

Consensus EPS est. is $1.08 for FY08.

With a recent price increase and solid mall traffic growth, UBS says there is upside to their 6 pct growth in Same Store Sales (F1Q07). And their EPS est. is $0.27 (+26 pct Y/Y) and $0.01 above consensus).

UBS opines that should sales acceleration occur (their estimate of +6 pct SSS vs. 5 pct at present) and Starbucks Card sales are robust, upside could continue into fiscal 2Q (ending March).

Accordingly, UBS upgraded SBUX to Buy-1. They maintain a $42 Price Target, which is roughly equal to a 1.65x PEG (based on the UBS 23% long-term EPS growth estimate.

Here is a 6-month chart (from ADVFN) that compares SBUX to the Dow 30 and the XLP (Consumer Staples ETF) prices. Relatively speaking, SBUX over six months has dropped to a Dow equivalent of 11606. Ouch.

Btw, I put Starbucks into the Consumer Staples because there is nothing discretionary about your morning coffee fix. Sitting in my kitchen is a cappuccino-expresso-coffee maker; fresh-brewed, one cup at a time. I know it's a staple. :-)

In Canada, it's hockey and Tim Horton's (THI), but Starbucks will do. After all, it's a Cara 100 company.

No Position.

ADDENDUM

To determine proper timing, I go to a combination of technical indicators, including Relative strength Index (RSI) and Moving Average Convergence-Divergence (MACD) analysis. The latter is simply a spread or departure analysis between a long and short term MA.

Long-term oriented traders start with the Monthly chart. Since we know this is a very long running Bull market, let's skip the Monthly. In fact the last time to buy SBUX on the Monthly was Sept-Oct 2001.

Start with a Weekly chart and move forward until you see the weekly RSI below 30. That happened in August this year, so I cut off the chart at that point for illustrative purposes.

Then, after you have found that point, move to the Daily and do the same. This chart, which I cut off at August 30 because I knew that was the time frame of the last good entry point, shows that there was a buying opportunity that I define as an Accumulation Zone below 30.

Now fast forward to today's Daily data chart for SBUX, and you'll see that following your purchase at say 30 in August, you could have sold at 38 in October for a +27 pct gain in about 60 days (certainly less than 90 days).

What I often do is go to Yahoo Finance and pull the news media stories about a stock during its time in the Accumulation Zone. I'm looking for reasons why traders were throwing out the stock. Were they being misled? That's always on my mind.

Trust me, after you do this many thousands of times over many years, you get to know who the clowns are. Remember Luskin's call on 430-440 gold the month before it was launched on its way to 730? I remember these things. They have a habit of repeating.

In the case of SBUX in mid-August, however, I did find that Cramer thought the stock was oversold and he was recommending it. Kudos to Cramer.

But, how about some guy by the name of Frank Curzio Jr, who writes a newsletter called fxcnewsletter, available at $15.95/month? Check out his analysis (page 1) (page 2) for RealMoney.com published at TheStreet.com. I think the guy got beaned by Starbucks. (lol)

As for me, I'll stick to quality research by the major Wall Street firms plus my technical indicators. That stuff in what I call the puff media is mostly smoke and mirrors by people who are experts in the craft of self-promotion.

There is a better way, and I'm glad you are seeing it.