Shares of Starbucks Corporation (NASDAQ: SBUX) opened about 2.0% up on Monday after Deutsche Bank and the Bank of America rated the stock at “buy”.
Deutsche’s Brian Mullan upgraded SBUX this morning to “buy” with a price target of $127 that represents a 12% upside from here.
BofA’s Sara Senatore, on the other hand, stuck an even higher $135 price target on the stock citing Starbucks was among the few that “built scale and derived supra-competitive returns”.
Terranova’s remarks on CNBC’s “Halftime Report”
Virtus Investment Partners’ Joe Terranova agreed to the bullish call on CNBC’s “Halftime Report” despite more challenges ahead. He said:
There is a difficult road ahead related to the slowdown in China and economic growth. That’s why the stock has underperformed since July. But I’m expecting to hear some encouraging guidance in that regard. So, I’m going to stay with the position.
Other reasons why he likes Starbucks included his confidence in Kevin Johnson’s leadership.
Why Jim Lebenthal likes Starbucks
During the same interview, Cerity Partners’ Jim Lebenthal, who also owns the stock, reiterated that the consolidation phase in recent months did not see SBUX lose investor sentiment. He added:
I think investor sentiment is quite good. As long as they don’t have missteps in execution, they’ll continue to march to higher multiples. It’s amazing the experience that they’re producing for customers.
The outlook, however, contrasts how MKM Partners’ JC O’Hara sees Starbucks. Last month, O’Hara said it was hard for him to like the technical setup in SBUX.
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