EU and US could reach trade deal this weekend - Reuters
On Wednesday, Jefferies analyst Andy Barish upgraded Starbucks stock from Underperform to Hold and established a new price target of $76.00. The adjustment comes amid recognition of challenges the company faces regarding near-term earnings visibility. According to InvestingPro data, the stock is currently trading at a P/E ratio of 26x, with analysts projecting profitability for the current fiscal year. Barish notes that while Starbucks continues to navigate through uncertainties, there are expectations of more clarity in the future as the new team settles.
Starbucks stock has been trading at approximately 20 times its forecasted fiscal 2027 earnings. Recent InvestingPro data shows the stock has fallen nearly 20% in the past week, with technical indicators suggesting oversold conditions. Barish points out that this valuation has historically marked a low point for the company during difficult periods. The new price target is based on 21 times the company's projected fiscal 2026 earnings.
The upgrade reflects a shift in perspective on Starbucks' potential to provide more information on its performance over the coming quarters. Despite the recent uncertainty that has impacted the company, Jefferies indicates that the stock's current valuation may represent a floor, suggesting limited downside from current levels.
Starbucks, a global coffeehouse chain, has been under scrutiny as it strives to return its earnings to levels seen in fiscal 2024. Investors looking to the future are using the anticipated earnings ramp in fiscal 2026 as a reference point for the company's financial trajectory.
The new rating and price target set by Jefferies offer a more neutral stance on Starbucks shares, indicating a hold position for investors until further signs of the company's direction and financial health become apparent. Notable strengths include the company's 15-year track record of consecutive dividend increases, with a current yield of 3.06%. For deeper insights into Starbucks' valuation and growth prospects, investors can access comprehensive analysis through InvestingPro's detailed research reports, which cover over 1,400 top US stocks.
In other recent news, Starbucks Corporation (NASDAQ:SBUX) announced a quarterly cash dividend of $0.61 per share, highlighting its commitment to returning value to shareholders. Meanwhile, analysts have been adjusting their outlooks on the company. Baird downgraded Starbucks' stock rating from Outperform to Neutral, reducing the price target from $114 to $85 due to concerns about near-term earnings risks and lower visibility in same-store traffic improvements. Similarly, Bernstein SocGen Group cut its price target from $115 to $105, citing the impact of new tariffs and potential recessionary trends on Starbucks' recovery efforts, though they maintained an Outperform rating.
Jefferies retained an Underperform rating with a price target of $76, reflecting a cautious outlook due to uncertainties in Starbucks' turnaround strategy. The analysts noted a conservative tone from CEO Brian Niccol during the Annual Shareholder meeting, influencing their financial projections. Additionally, Starbucks held its 2025 Annual Meeting, where all nine director nominees were elected, and shareholders passed an advisory resolution on executive compensation. The ratification of Deloitte & Touche LLP as the company's independent accounting firm was also approved. However, several shareholder proposals, including those on discrimination risks and human rights, failed to pass. These developments provide a snapshot of the current investor sentiment and strategic direction for Starbucks.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.