NEW YORK (TheStreet) -- The tax practices of the world's largest coffee chain, Starbucks Corp. , are coming under suspicion among regulators and local governments in Europe after the company spent years reporting losses in its biggest European markets despite posting hundreds of millions of dollars in annual sales, the Wall Street Journal reports. Shares of Starbucks are down by 0.21% to $94.32 in late afternoon trading on Tuesday. European investigators opened a formal investigation last year after a profit of $466.6 million appeared, the Journal noted, adding that the large profit will most likely raise concerns about Starbucks European tax practices, which are currently under scrutiny for the second time in less than two years. EU antitrust chief Margrethe Vestager is running the investigation of Starbucks' tax affairs and has said she will announce the results by June, which the Journal says may include "sizable back-tax demands." Starbucks has said that its complex European structure, first centered in the Netherlands then the U.K., was not designed to avoid taxes, but rather built around its Amsterdam-based coffee roasting house. The Amsterdam unit paid only 2.6 million euros in corporate tax on last year's 407 million euro pre-tax profit in the Netherlands or less than 1%, as part of a deal between the company and the country which has gained the attention of EU regulators, the Journal said. Separately, TheStreet Ratings team rates STARBUCKS CORP as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation: "We rate STARBUCKS CORP (SBUX) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins." Highlights from the analysis by TheStreet Ratings Team goes as follows: The revenue growth came in higher than the industry average of 6.7%. Since the same quarter one year prior, revenues rose by 13.3%. Growth in the company's revenue appears to have helped boost the earnings per share. Powered by its strong earnings growth of 83.09% and other important driving factors, this stock has surged by 25.68% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year. STARBUCKS CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, STARBUCKS CORP turned its bottom line around by earning $2.71 versus -$0.01 in the prior year. This year, the market expects an improvement in earnings ($3.12 versus $2.71). The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income increased by 81.8% when compared to the same quarter one year prior, rising from $540.70 million to $983.10 million. The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, STARBUCKS CORP's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500. You can view the full analysis from the report here: SBUX Ratings Report Must Read: Warren Buffett's Top 25 Stocks for 2015
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