Starbucks Gains After BofA, Deutsche Call It a Buy © Reuters.
By Dhirendra Tripathi
Investing.com – Starbucks stock (NASDAQ:SBUX) rose 1.5% on Monday after BofA Securities (NYSE:BAC) and Deutsche Bank (NYSE:DB) rated it a buy.
BofA resumed its coverage of the stock with a $135 target, around 19% higher than its current level.
According to the brokerage’s Sara Senatore, growth in the specialty coffee segment continues to outpace that of overall food service globally, including the U.S. The analyst says Starbucks is one of the few that have been able to build scale and thus derived supra-competitive returns.
The impact of smaller concepts, including those with high growth, will be limited in the near term, Senatore says.
Deutsche Bank analyst Brian Mullan upgraded Starbucks to buy from hold while keeping the $127 garget unchanged. According to Mullan, while there are reasons to ‘fret’ with the coffee brewer, one could start to “leg in” and ultimately be rewarded for taking the risk.