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On Wednesday, Evercore ISI revised its price target for Starbucks Corporation (NASDAQ:SBUX) shares, reducing it from $105.00 to $95.00. With the stock currently trading at $84.85 and a market capitalization of $96.38 billion, this target represents significant upside potential. Despite this adjustment, the firm continues to recommend an Outperform rating for the coffee giant’s stock. According to InvestingPro data, 17 analysts have recently revised their earnings expectations downward for the upcoming period. The new price target is derived from a Discounted Cash Flow (DCF) analysis and equates to approximately 35 times the firm’s estimated earnings per share (EPS) for fiscal year 2026, which is at the upper end of Starbucks’ historical trading range of 20 to 35 times EPS.
The research firm’s decision to maintain the Outperform rating while lowering the price target reflects their belief in Starbucks’ long-term growth potential. They anticipate that the company will undergo a multi-year recovery period following a phase of strategic investments. This comes as the stock has experienced a challenging period, with InvestingPro data showing a 12.14% decline over the past six months. Despite these headwinds, the company maintains a strong dividend track record, having raised its dividend for 15 consecutive years, with a current yield of 2.88%. This outlook is supported by the brand’s strength and the successful turnaround history of Starbucks’ CEO, Brian Niccol.
Evercore ISI’s analysis suggests that after the investment period, Starbucks could experience an EPS growth rate of over 15% beyond fiscal year 2026. This projection is based on the firm’s confidence in the company’s ability to recover and expand its earnings significantly in the years following the anticipated investments.
The adjustment in Starbucks’ price target by Evercore ISI takes into account the company’s current valuation within its historical trading range. The firm’s analysis indicates that due to Starbucks’ robust brand and the CEO’s track record, the stock merits a valuation at the higher end of this range.
In summary, Evercore ISI has adjusted the price target for Starbucks to $95.00 while maintaining an optimistic outlook on the stock’s performance. The firm’s analysis suggests a strong recovery and growth phase for Starbucks in the coming years, justifying the Outperform rating despite the reduced price target. For deeper insights into Starbucks’ valuation and growth prospects, InvestingPro offers a comprehensive analysis through its Pro Research Report, which is part of its coverage of over 1,400 US stocks.
In other recent news, Starbucks Corporation reported its Q2 2025 earnings, revealing a decline in earnings per share (EPS) to $0.41, missing the forecasted $0.51. The company’s revenue reached $8.8 billion, slightly below the anticipated $8.89 billion. Global comparable store sales decreased by 1%, although there was a 3% increase in ticket growth in the U.S. Despite these challenges, Starbucks noted positive transaction growth in Canada and the Middle East, with signs of stabilization in China. KeyBanc Capital Markets maintained a Sector Weight rating on Starbucks but adjusted its earnings projections following the company’s results, citing strategic changes and potential increased labor expenses as factors. KeyBanc lowered its EPS forecast for fiscal years 2025 and 2026 to $2.56 and $3.10, respectively. Starbucks continues to focus on its strategic initiatives, including enhancing operational efficiency and exploring new product innovations.
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