Starbucks (SBUX) Stock Up, Goldman Sachs Adds to 'Outperform' List

Starbucks (SBUX) stock was added to the Americas Conviction Buy List at Goldman Sachs based on favorable valuation and expected acceleration in its comps.
By Natalie Walters ,

NEW YORK (TheStreet) -- Shares of Starbucks (SBUX) - Get Report are up by 0.53% to $58.26 in late-morning trading Tuesday, as Goldman Sachs added the company to the Americas Conviction Buy List. The firm has a "buy" rating and a $69 price target on the stock. 

The list includes stocks that the firm believes will outperform. 

Starbucks was added because the company has a favorable valuation and its comps are expected to accelerate in the fiscal 2016 fourth quarter, according to the analyst note. 

The Seattle-based coffee company could return to a comp algorithm above 5%, Goldman said. "With the loyalty noise in the past, SBUX is now in a position to tap into a pipeline that includes driving MOAP adoption, refined suggestive selling in the app, and better 1-1 marketing capabilities," the firm wrote. 

On Thursday, Starbucks reported fiscal 2016 third quarter results that were weighed down by a revenue miss. 

(Starbucks is held in Jim Cramer's charitable trust Action Alerts PLUS. See all of his holding with a free trial here.)

Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:

We rate STARBUCKS CORP as a Buy with a ratings score of A-. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, revenue growth, solid stock price performance and increase in net income. We feel its strengths outweigh the fact that the company shows low profit margins.

You can view the full analysis from the report here: SBUX

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