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Investing.com - Baird has upgraded Starbucks (NASDAQ:SBUX) stock rating from Neutral to Outperform, while raising its price target to $115.00 from $100.00. The coffee chain giant, currently trading at $91.74 with a market capitalization of $104.28 billion, is currently trading above its InvestingPro Fair Value.
The upgrade reflects Baird’s "high conviction" that turnaround strategies implemented under new leadership will effectively transform Starbucks into a "better company."
Baird expects visibility of this transformation to become "increasingly clear over the next several quarters" as the coffee chain continues to implement its strategic initiatives.
The firm anticipates that "tangible evidence of progress toward better financial performance" will boost investor sentiment toward Starbucks.
This improved sentiment should help "support elevated valuation metrics on the shares as earnings start to rebound," according to Baird’s analysis.
In other recent news, Starbucks has been making several strategic moves and receiving attention from analysts. The company plans to install ordering kiosks at busy U.S. airport locations to reduce long lines, a priority highlighted by Chief Operating Officer Mike Grams for the fourth fiscal quarter. Despite reporting fiscal third-quarter earnings per share of $0.50, which fell short of Guggenheim’s estimate of $0.58, the firm raised its price target for Starbucks to $90, maintaining a Neutral rating. RBC Capital also increased its price target to $110, citing Starbucks’ positive third-quarter performance with improved North American traffic. Piper Sandler adjusted its price target to $105, noting the accelerated rollout of Starbucks’ service model. Additionally, Bernstein reiterated an Outperform rating with a $100 target, pointing to Starbucks’ menu innovation and operational progress. The firm believes new menu offerings could attract new consumers and boost sales. These developments reflect a period of strategic adjustments and analyst interest in Starbucks.
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