The upgrade comes with a price target of $92 per share, up from the firm's previous price target of $76 and a 16% upside from the stock's closing price Friday of $79.54.
In trading Monday, Dunkin' rose 4% to $82.78.
The upgrade was based on the firm's view that Dunkin' is reaching an inflection point in its same-store sales growth driven by its new espresso beverage options and non-breakfast performance.
"Importantly, in our view, the probability of a sustained inflection beyond the near-term is now high enough to warrant a more positive stance," said Setyan.
The analyst might be late to the party, however, as the stock has risen 25% since the start of the year.
"Among Dunkin' franchisees, we have observed a noticeable uptick in positive expectations regarding the likelihood of ongoing top line initiatives to sustain SSS growth beyond the near-term. These initiatives include more selective unit growth (lower cannibalization), successful menu innovation at both the low- and high-end of the barbell (including the heightened focus on espresso beverages), the operational benefits of menu simplification, technology initiatives, and a more focused brand message," Setyan wrote.