Starbucks (SBUX) - Get Starbucks Corporation Report 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.


(MCD) - Get McDonald's Corporation (MCD) Report

, Starbucks and

Dunkin' Donuts

have all been aggressively advertising their coffee drinks in the past few months.

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

Starbucks has even embarked on lowering price points on select beverages. The verdict is still out on whether or not consumers believe Starbucks is still a luxury they cannot afford.

Tarantino raised his stock price to $17 from $15, suggesting the shares may gain 24% in the next 12 months.

As a result, shares of Starbucks climbed 4.5% to $14.32 in afternoon trading -- but is Starbucks winning the bigger war?

Jim Cramer doesn't seem to think so. In his "Mad Money" segment on Monday he said he would

steer clear of Starbucks in the near-term


In the battle between coffee brewers, McDonald's is the clear winner, Cramer said, as it quickly rolls out McCafe, a more wallet-friendly alternative to Starbucks' budget-busting triple ventis.

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