Shares of Starbucks Jumpy on Upgrade

Starbucks (SBUX) continued on its two-day caffeine bending, rising in afternoon trading Wednesday after an analyst upgraded the coffee retailer.

Shares in the company soared 18% to $17.35 in afternoon trading, a day after the company swung to a quarterly profit.

Deutsche Bank analyst Marc Greenberg upgraded Starbucks to hold from sell, citing better cost management and a potential bottoming of weak top-line trends.

While Greenberg said Starbuck is still being threatened by McDonald's ( MCD) as consumers cut back on perceived luxuries -- including $4 mocha frappacuinos -- it is faring better than expected.

Greenberg raised his target price on the stock to $14 from $9, and expects fourth-quarter earnings of 19 cents a share, up from previous guidance of 17 cents.

Jeffries & Co. analyst Jeff Farmer also raised his price target to $16 from $14 and boosted his 2010 earnings outlook to 88 cents a share from 83 cents. But he said that in order for shares to make their next upswing the company will need "meaningful" same-store sales improvement.

On Tuesday, the company posted third quarter profit of $151.5 million, or 20 cents a share, compared with a loss of $6.7 million, or 1 cents, in the year-ago period. Analysts expected earnings of 19 cents a share.

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