Starbucks price target raised to $118 from $112 at BofA

BofA raised the firm’s price target on Starbucks (SBUX) to $118 from $112 and keeps a Buy rating on the shares as the analyst applies a higher relative multiple to reflect greater confidence in Starbucks’ execution under new CEO Brian Niccol. Lower China asset intensity would buoy Starbucks returns and its multiple, while licensing China would also allow management to train its focus on the U.S., argues the analyst, who says Niccol may be receptive to licensing given his experience includes Yum! Brands’ (YUM) highly franchised model and Chipotle’s (CMG) more selective licensing approach to the Middle East.