Starbucks rallies as analysts talk up long-term potential

Starbucks(SBUX+1.9%)is gaining back ground as analysts point to more upside potential for the coffee chain juggernaut.

BTIG still sees upside for Starbucks even after the company posted what it says was a stellar quarter.

Analyst Peter Saleh (Buy rating on SBUX, PT of $130): "While comps in China were slightly below expectations owing to some mobility/travel restrictions following COVID resurgence, domestic sales continued to improve with the easiest full quarter comparisons still ahead. We believe Starbucks could continue to top EPS expectations given the sales recovery in the U.S., near full recovery in China and margin benefits from the trade area transformation... we still see opportunity for upside."

Cowen says Starbucks is still its favorite restaurant reopening pick.

Analyst Andrew Charles (Outperform, $126 PT): "SBUX has returned to beat & raise mode, and we believe there is cushion within guidance for beats & raises to continue. Given SBUX's forward P/E ratio pre-COVID-19 had a +0.86 correlation with Americas same store sales, we see room for multiple expansion based on confidence in the U.S. recovery that should overshadow a potentially bumpier int'l recovery."

Read what Starbucks management said about the outlook for 2021on the earnings conference call.