DA Davidson Upgrades Starbucks (SBUX) to Buy; Leading Large Cap Consumer Story Deserves a Higher Valuation

DA Davidson upgraded Starbucks (NASDAQ: SBUX) from Neutral to Buy, raising price target from $48 to $55.

DA analyst says, "Growth rate and sustainability drive our more aggressive view on valuation. We expect SBUX will generate 20% earnings growth for the next 3-5 years, which is very impressive for a $34 billion company. Given the scarcity of large cap consumer growth companies, we anticipate the valuation will continue to expand...Other leading large cap consumer stocks trade at relatively similar 2013 valuations despite offering much less attractive growth profiles. We believe Starbucks offers compelling global growth and the business is more defensive than some investors appreciate."

DA raises FY12 EPS estimate from $1.82 to $1.85 and FY13 from $2.30 to $2.35.

For an analyst ratings summary and ratings history on Starbucks click here. For more ratings news on Starbucks click here.

Shares of Starbucks closed at $45.94 yesterday.

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