TD Cowen Upgrades Starbucks to Buy, Raises Target to $120

TD Cowen upgraded Starbucks (NASDAQ:SBUX) from Hold to Buy and raised its price target to $120 from $106, citing "numerous tangible drivers" for a comeback story.

Rating Change

• Previous Rating: Hold
• New Rating: Buy
• Previous Price Target: $106
• New Price Target: $120 (implies ~13.2% upside)

Analyst Rationale

TD Cowen analysts pointed to several tangible drivers that should fuel positive sales revisions against a strong category backdrop:

• Margin Recovery: Improved operational efficiency and supply chain management.
• Sales Drivers: Menu innovation, international expansion, and rising demand for cold beverages.
• Strong Category Backdrop: Robust performance in the restaurant and beverage sector.

Context

Starbucks shares have been volatile over the past year amid inflationary pressures and supply chain challenges. However, recent quarterly results showed signs of improvement, leading to this upgrade. No other major analysts have echoed this view yet, but the upgrade signals growing confidence in Starbucks' ability to reignite growth.

What to Make of It

TD Cowen's upgrade reflects a positive outlook for Starbucks, but investors should consider that the new price target is still subject to economic risks and competition. Monitor upcoming quarterly reports to assess whether the growth drivers materialize.