Starbucks (SBUX) is benefiting from strong positioning across several brand attributes key to driving customer visits, as its operational initiatives, digital enhancements, and menu innovation seem to be resonating, UBS said in a Wednesday note.

The company's "Back to Starbucks" strategy has gained traction and boosted growth momentum and outlook "meaningfully," underpinning stronger US transaction trends and a return to positive comparable sales growth, UBS analysts said. They added that improving brand perception and continued positive net visit intent over the next 12 months balance feedback from survey respondents that highlighted spending pressures.

US sales momentum looks sustainable in the coming years, approaching mid-single-digit percentages rather than the high-single-digit percentages in past quarters, the analysts said. They expect upside potential from the announced store closures in North America of about 250, on top of the previous closures of over 500.

Same-store sales should see continued growth based on Starbucks' improved execution and opportunities in menu innovation, marketing, and operations, the analysts said.

UBS maintained the company's stock rating at neutral and adjusted the price target to $105 from $112.

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