UPDATE: Piper Jaffray Raises PT on Peet's Coffee & Tea to $40 (PEET)

Piper Jaffray is out with its report today on Peet's Coffee & Tea

, raising its price target from $35 to $40. In a note to clients, Piper Jaffray writes, "We are increasing our price target on PEET shares from $35 to $40. We are moving our PE multiple target year out to 2012 as we move into 2011. We have increased our PE multiple from 22x to 23x as we expect incrementally more op margin expansion in each of the next two years; a 23x multiple is still below current levels. We believe Peets PE trades above its long-term growth rate due to strong growth with its specialty division (~20%) and the potential for a partnership with Green Mountain Coffee

in the very fast growth single serve segment of the consumer coffee market. We continue to believe there is a good chance Peets will enter the single serve segment and shares would likely move higher on such a partnership." Piper Jaffray maintains Neutral on PEET. Shares of PEET closed Wednesday at $43.00.