Starbucks Gets a Jolt From Upgrade

Starbucks(SBUX Quote) perked up on Tuesday after being upgraded by an analyst on improving traffic trends.

R.W. Baird analyst David Tarantino said in a note that he has "become more confident in (Starbucks') near-term outlook" after informal interviews with the executives of several private coffee-oriented chains showed that industry traffic has improved from April through June.

Tarantino said new marketing campaigns by the coffee retailer have also helped stimulate traffic. "We think marketing campaigns (by McDonald's, Starbucks, others) may be spurring interest in a category that has not seen much advertising historically," he wrote. McDonald's(MCD Quote), Starbucks and Dunkin' Donuts have all been aggressively advertising their coffee drinks in the past few months.

Cost-saving initiatives at Starbucks -- including shutting down underperforming stores and chopping general and administrative costs -- should help increase profit, Tarantino wrote. ...