Jefferies Upgrades Starbucks to Hold as China and U.S. Outlook Improves

Jefferies has upgraded Starbucks (SBUX) shares from Underperform to Hold, signaling a shift toward a more constructive view of the coffee giant's prospects. Alongside the upgrade, the investment bank raised its price target for the stock to $92 from a previous $86. Analysts attributed the move to improved visibility regarding a potential exit from its China franchise operations and signs of stabilization in the U.S. market. Furthermore, Jefferies highlighted a clearer path to execution under the leadership of CEO Brian Niccol as a key factor in the balanced outlook. However, the firm noted that Starbucks shares continue to trade at a premium it considers difficult to justify, despite the rating upgrade. This rating change reflects growing confidence in strategic shifts aimed at optimizing performance, even as valuation concerns persist.