The Zacks Analyst Blog Highlights:Royal Dutch Shell, Starbucks, Green Mountain Coffee Roasters, Target and Wal-Mart Stores

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Jan 17, 2014, 09:30 ET

CHICAGO, Jan. 17, 2014 /PRNewswire/ -- 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 the Royal Dutch Shell plc (NYSE:RDS.A-Free Report), Starbucks Corporation (Nasdaq:SBUX-Free Report), Green Mountain Coffee Roasters Inc. (Nasdaq:GMCR-Free Report), Target Corp. (NYSE:TGT-Free Report) and Wal-Mart Stores Inc. (NYSE:WMT-Free Report).

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Here are highlights from Thursday's Analyst Blog:

Shell Downgraded to Strong Sell

On Jan 15, 2014, Zacks Investment Research downgraded Europe's oil giant Royal Dutch Shell plc (NYSE:RDS.A-Free Report) to a Zacks Rank #5 (Strong Sell).

Why the Downgrade?

The leading integrated energy company has experienced a disappointing earnings phase. It has missed the Zacks Consensus Estimate in the last two quarters and the future looks bleak as well. The Zacks Consensus Estimate for the fourth quarter of 2013 has gone down by 1.7% to $1.77 per share in the last 30 days. Moreover, for the full year, estimates have gone down by 6 cents and are currently pegged at $7.03 per share in the same time frame.

Shell has a high capital spending habit that gathers negative sentiment. The company expects full-year 2013 capital expenditure to exceed previous estimates by $5 billion, and touch a record level of $45 billion. This over spending could hamper investor interest as it significantly restricts cash flows.

The company intends to pickup divestitures this year under the guidance of its new chief executive, Ben van Beurden. Though this may bring the much needed cash to meet company and investor interests, it could hamper productivity.

Shell is the most gas-focused among the major companies in the sector, with more than half of its current production from the commodity. Given natural gas' volatile fundamentals, this remains a key area of concern, in our view.

Also, from the industry rank perspective, Shell does not look too good as well. It has a Zacks industry rank of 210 out of 265 industries. Being part of a weak industry could dampen the prospects of a company on a macro level.

Starbucks Launching New Seattle's Best Products

Starbucks Corporation (Nasdaq:SBUX-Free Report) recently announced that it plans to launch three new coffee products under its Seattle's Best Coffee brand. With the launch, the brand will be joining two new at-home coffee categories.

Seattle's Best Coffee will now be available in K-Cup portion packs, frozen coffee blends and instant coffee forms. The K-Cup packs will introduce Seattle's Best Coffee brand to the $1.8 billion U.S. single-serve coffee category, while the Instant Lattes will expose the brand to the $740 million instant coffee category. With this, Seattle's Best Coffee will now be available in packaged roast & ground, frozen, instant and single-serve coffee forms.

Seattle's Best Coffee K-Cup packs will be compatible with Green Mountain Coffee Roasters Inc. (Nasdaq:GMCR-Free Report) Keurig brewers. In May last year, Starbucks expanded its long-term strategic partnership with Green Mountain. Under the expanded agreement, Starbucks agreed to supply four other brands, including Seattle's Best Coffee, to Green Mountain to be used on the Keurig platform. The coffee giant is already supplying single-serve Vue and K-Cup packs to Green Mountain.

Seattle's Best Coffee K-Cup packs will be available in five varieties of medium roast blends and are expected to hit grocery and mass retailer shelves in Mar 2014. They have been proposed to be priced at $7.99 for a pack of 10 at grocery stores or $10.99 for a pack of 16 at Target Corp.'s (NYSE:TGT-Free Report) stores nationwide.

The Instant Lattes, which have been available at stores of Wal-Mart Stores Inc. (NYSE:WMT-Free Report) since Sep 2013 are expected to be available at other grocery retailers soon. Available in three flavors, the lattes are proposed to be priced at $5.99 for 12 servings.

The frozen blends, House Blend and Breakfast Blend, are expected to hit the store shelves later this month.

Starbucks carries a Zacks Rank #3 (Hold).

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