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On Wednesday, Jefferies analyst Andy Barish maintained an Underperform rating on Starbucks stock, with a steady price target of $76.00, significantly below the current trading price of $100.41. Barish’s assessment followed Starbucks’ first fiscal quarter same-store sales (SSS) results, which showed a 4% decline but were received better than anticipated. The company’s margin and earnings per share (EPS) aligned with consensus when excluding a one-time tax item and lower-than-expected interest expenses. InvestingPro data reveals that 9 analysts have recently revised their earnings downward, with the stock currently trading at a relatively high P/E ratio of 30.12.
Despite the somewhat positive SSS outcome, Barish expressed concerns about the core business of Starbucks, particularly in the U.S. and China. He suggested that near-term SSS could fall short of expectations, especially as management indicated positive U.S. SSS would begin in the second quarter, which contradicts Barish’s own model that predicts a 2% decline.
The analyst also pointed out that an increase in general and administrative (G&A) expenses due to ramped-up investments is likely to result in lower EPS and EBITDA estimates for the fiscal years 2025 and 2026 in his model. This outlook reaffirms the Underperform rating and the set price target for Starbucks shares.
In other recent news, Starbucks Corporation (NASDAQ:SBUX) has been a focus of several analyst firms. RBC Capital Markets maintained an Outperform rating on Starbucks shares, with a price target of $115, following mixed but overall positive first-quarter results, particularly in North America. Despite the company’s CFO providing a margin outlook for 2025 that fell short of analyst expectations, RBC reiterated their confidence in Starbucks’ revenue drivers.
UBS analyst Dennis Geiger increased the price target for Starbucks stock to $105, while maintaining a Neutral rating. Geiger’s adjustment followed Starbucks’ first-quarter earnings, which showcased stronger-than-anticipated same-store sales and a slight uptick in margins and earnings. However, he noted that earnings per share are likely to be significantly pressured in the second quarter due to investments and restructuring charges.
Stifel analysts showed optimism for Starbucks stock, increasing the price target to $114 from the previous $110, while reiterating a Buy rating. They anticipate an uptick in U.S. comparable sales and suggest that recent mobile location data indicates a slight improvement in visitation trends. Stifel’s revised price target reflects confidence in Starbucks’ potential for sales improvement and operational enhancements.
In other developments, Starbucks shares fell 1% following President Trump’s threat of tariffs on Colombian exports, which could potentially impact the coffee giant’s supply chain. However, the situation deescalated when the White House announced that Colombia agreed to accept deported migrants on U.S. military aircraft, averting the proposed tariffs.
Lastly, Alshaya Group, a Kuwait-based conglomerate, paused discussions regarding the sale of a stake in its Starbucks Corp . franchise. The franchise spans across the Middle East, North Africa, and central Asia. These recent developments provide investors with insights into Starbucks’ operational and financial landscape.
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