Shares of Starbucks (SBUX) - Get Starbucks Corporation Report were climbing over 2% during Tuesday morning trading after Morgan Stanley noted that the stock, whose shares are lower over 11% the past three months, could be ready for a rebound.

"While investors continue to debate the new long-term growth rate for SBUX, our work shows that the market has already quietly adjusted to a more moderate 12%-17% [earnings growth]," Morgan Stanley analyst Brian Hayes wrote in a note obtained by Barron's.

Hayes reached this conclusion by analyzing Starbucks' price/earnings to growth ratio (PEG) relative to its return on invested capital (ROIC), compared to its peers.

"That relationship is relatively linear across our restaurant universe, with higher returns growth commanding commensurately higher multiples vs. growth at low returns," Hayes explained. "This construct suggests that a reframed long-term growth rate of 12%-17% (vs. 15%-20%) would still yield a fair value at 23x under current conditions."

While he noted that this is where the stock currently trades at today, he argues that further upside exists with "greater earnings visibility and any acceleration vs. current comp trends."

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"More achievable long-term targets also have tactical value to shareholders, as it relieves an overhang in the stock. "

Hayes lowered his price target on the coffee giant to $62, down from $68. But, that's higher than roughly $54, where stock currently trades.

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