Starbucks Price Target Raised At Jefferies Following Analyst Day Presentation

Andy Barish of Jefferies maintained a Buy rating on shares of Starbucks Corporation (NASDAQ: SBUX) on Monday with a price target raised to $97 from a previous $88.

Barish notes that Starbuck's five-year plan, which was introduced during the company's Analyst Day presentation last week, implies an earnings per share growth by fiscal 2019 by a factor of two.

"Today Starbucks benefits from more flexible store formats, world class operations and multiple same-store layers," Barish wrote in a note. "We do not expect significant upside to the model, but like the earnings per share visibility and think a normalized restaurant growth valuation could drive mid-teens total returns annually."

Barish is "encouraged" by Starbucks' near-term same-store sale drivers, specifically food that is expected to deliver around 2 percent same-store sales improvements. The analyst also adds that Starbucks' Mobile Order & Pay program could attract higher food traffic and yield more operational efficiency.

Barish believes that there exists "structural issues" among other large-cap restaurant operators. The analyst adds that given Starbucks' fundamentals which are both strong and sustainable, the coffee-chain is well positioned to take share from its peers, especially in food sales.