Jim Cramer Weighs In On Starbucks' Stock Following Analyst Upgrade

Starbucks Corp (NASDAQ: SBUX) was the featured stock on Jim Cramer's "Mad Dash" segment Monday morning.

What Happened: Stephens & Co. analyst James Rutherford upgraded Starbucks from an Equal-Weight rating to an Overweight rating and raised the price target from $118 to $130.

Rutherford sees increased spending on employee wages as a smart move and expects that it will give Starbucks a competitive advantage in the foodservice industry. 

Related Link: Why Starbucks Shares Are Rising

Cramer's Take: Stephens & Co. is saying the market is viewing an increase in wages as bad, but it should actually be viewed as a competitive advantage, according to Cramer. 

"It actually could mean that the competition, frankly, will lose because Starbucks is going to be able to maintain the employees and be able to have the growth."

Cramer thinks Starbucks can continue to take market share from other coffee companies as the company continues to do "a lot of good stuff technologically."

Why It Matters: Starbucks' stock traded significantly lower on Friday following the company's financial results.

Starbucks reported quarterly adjusted earnings of $1 per share, which beat the estimate of 99 cents. The company reported quarterly revenue of $8.15 billion, which came in below the estimate of $8.21 billion.

"I was surprised that the stock got hammered so badly because the numbers were roughly in line," Cramer said.

SBUX Price Action: Starbucks has traded as high as $126.32 and as low as $85.45 over a 52-week period.

The stock was up 3.4% at $109.69 at time of publication.

Photo: Engin Akyurt from Pixabay.