Starbucks, M&T Bank: Ratings Changes

The stock: M&T has rallied 9% this year, trailing major U.S. indices. The stock trades at a price-to-earnings ratio of 23, a premium to the market, but a discount to regional banks. The shares pay a 4.5% dividend yield.

The model upgraded Public Storage(PSA), a real estate investment trust that owns self-storage facilities, to "buy."

The numbers: Third-quarter net income rose 73% to $237 million and earnings per share doubled to $1.02. Revenue declined 5% to $422 million. The company's gross and operating margins decreased from 48% to 47%. Public Storage has a strong financial position, with $671 million of cash and $522 million of debt.

The stock: Public Storage has fallen 5% this year, underperforming major U.S. indices. The stock trades at a price-to-earnings ratio of 22, a premium to the market, but a discount to REITs. The shares pay a cash distribution yield of 2.9%.

The model upgraded coffee chain Starbucks(SBUX) to "buy."

The numbers: Fiscal fourth-quarter profit grew 30-fold to $150 million and earnings per share rose 20-fold to 20 cents, restrained by a higher share count. Revenue decreased 4% to $2.4 billion. The company's gross margin increased from 13% to 20%, and its operating margin rose from 3% to 9%. A quick ratio of 0.6 indicates poor liquidity. A debt-to-equity ratio of 0.2 reflects modest leverage.

The stock: Starbucks shares have doubled this year, beating major U.S. indices. The stock trades at a price-to-earnings ratio of 38, a premium to the market and restaurant peers. Starbucks doesn't pay dividends.

-- Reported by Jake Lynch in Boston.

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