Analysts at Jefferies & Co. on Tuesday initiated coverage on coffee giant Starbucks Corporation ( SBUX ) with a "Buy" rating.
The firm also set a $50 price target on SBUX, suggesting a nearly 14% upside to the stock's Monday closing price of $44.
A Jefferies analyst commented, "We find SBUX attractive for its global growth potential, strong relative EPS prospects, improved operations, management, and predictability in the business. We are encouraged that these trends are sustainable and that the current valuation does not fully reflect this strong brand and its increasing CPG and international presence, which could help drive growth and a higher multiple over time."
Starbucks shares posted modest gains in premarket trading Tuesday.
The Bottom Line
Shares of Starbucks ( SBUX ) have a 1.55% dividend yield, based on last night's closing stock price of $44.00. The stock has technical support in the $40-$42 price area. The stock is trading near all-time highs and has little overhead resistance.
Starbucks Corporation ( SBUX ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.
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