Jim Lebenthal Weighs In On Starbucks Stock Following Analyst Upgrade

Starbucks Corp SBUX was featured as the call of the day Tuesday on CNBC's "Fast Money Halftime Report."

What Happened: MKM Partners analyst Brett Levy upgraded Starbucks from Neutral to Buy and raised the price target from $114 to $130.

Levy sees Starbucks' recent underperformance as a buying opportunity. Company investments have created a short-tem slowdown in the stock, but position Starbucks for increased revenue and profit streams over the longer term, according to the MKM Partners analyst.

Lebenthal's Take: "There is the bottom quintile of stocks [in my portfolio] in terms of who's my favorite and Starbucks is in it," Cerity Partners' Jim Lebenthal said Tuesday on CNBC's "Fast Money Halftime Report."

If the company was awful, he wouldn't own it, he said, but it's expensive at current levels and the company "blew it" during its most recent earnings report.

See Also: Starbucks To $130 Or A Whopping $200? Here's What The Chart Says

Lebenthal pointed to the company's guidance as a reason for why Starbucks is "on thin ice" in his portfolio. Starbucks said it expects earnings growth of "at least 10%" in 2022.

If the company doesn't report better financial results and issue better guidance in its next earnings report, Lebenthal told CNBC that he plans to sell his shares. 

"This stock serves a purpose in my portfolio of nicely tracking the S&P 500. It was outperforming on a multiple-year basis until this last quarter," Lebenthal said. "I will stick around, but it is on thin ice."

SBUX Price Action: Starbucks has traded as high as $126.32 and as low as $95.92 over a 52-week period.

The stock was up 2.63% at $116.34 Tuesday afternoon. 

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