Piper Jaffray Backs its “Buy” Rating on Starbucks; Global Growth Still Attractive (SBUX)

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Coffee retailer Starbucks Corporation ( SBUX ) on Tuesday saw its "Buy" rating reiterated by analysts at Piper Jaffray.

The firm also backed its $50 price target on SBUX, suggesting a nearly 33% upside to the stock's Monday closing price of $37.65.

A Piper Jaffray analyst commented, "We continue to believe Starbucks remains well-positioned in spite of ongoing coffee price inflation, where prices were still up substantially on a y/y basis as of August, but have been moderating of late. We note that SBUX has 100% of its coffee needs contracted for FY11 and FY12. In particular, we remain attracted to the company's ongoing transition to a global growth portfolio via the growth and evolution of its consumer packaged goods (CPG) business segment which we believe can help drive meaningful operating expansion of ~400 bps over time. We reiterate our Overweight rating and $50 price target, which implies a ~$7/share valuation for the company's CPG segment."

Starbucks shares were unchanged in premarket trading Tuesday.

The Bottom Line
Shares of Starbucks ( SBUX ) have a 1.38% dividend yield, based on last night's closing stock price of $37.65. The stock has technical support in the $34 price area. If the stock can firm up, we see overhead resistance around the all-time high levels of $40-$41 a share.

Starbucks Corporation ( SBUX ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Created by Dividend.com

This article appears in: Investing , Stocks

Referenced Stocks: SBUX



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