UPDATE: Jefferies Initiates Buy, $68 Target on Peet's Coffee and Tea

Jefferies initiates coverage on Peet's Coffee and Tea (NADAQ: PEET) with a Buy rating and a price target of $68 per share as the company is seen as a compelling CPG growth story.

Jefferies says, “We rate PEET Buy, as we believe ests & valuation do not reflect 3 key dynamics: 1) Peet's biz model transformation is shifting into high gear, with its high-margin CPG biz now 60% of profits & growing; 2) Peet's is gaining mkt share in grocery & tangible drivers for '12/13 are not being fully recognized; 3) Investments made/infrastructure in-place to support much bigger biz & drive higher growth/margins in coming years.”

PEET closed at $59.12 per share on Monday.