Jefferies analyst Andy Barish raised his price target for Starbucks (SBUX) to $110 from $96 saying the 6% global same-store-sales surprise versus the 4% consensus in fiscal Q3 reflected execution, menu innovation and digital.
The stock in premarket trading is up 6%, or $5.72, to $96.70.
The analyst has increased confidence in his long-term model for Starbucks and keeps a Buy rating on the shares.
While the company's valuation is "certainly outsized" versus its historical metrics, it is reasonable for Starbucks to trade in line with global, asset-lite peers and other fast-casual peers delivering sustained same-store-sales momentum, Barish tells investors in a research note.
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