Citi ups Starbucks target, adds ‘upside 90-day short-term view’

Citi analyst Jon Tower raised the firm’s price target on Starbucks (SBUX) to $95 from $84 and keeps a Neutral rating on the shares. The firm also added an “upside 90-day short-term view” on Starbucks. The company’s pull-forward of labor investment back into stores will likely lead to a faster recovery in traffic, the analyst tells investors in a research note. The firm says that while the cost of this investment remains unclear, the improvement in one-year traffic trends, particularly given soft comparisons, will likely drive shares higher in the near-term. Citi believes, however, that Starbucks’ turnaround narrative remains “this will take time,” as sales are emphasized before margins, and its long term profitability “remains unclear.”