Morgan Stanley raises Starbucks stock price target to $105 on turnaround potential

Investing.com - Morgan Stanley has raised its price target on Starbucks (NASDAQ:SBUX) to $105.00 from $103.00 while maintaining an Overweight rating on the stock. Currently trading at $85.36, the stock sits between analysts’ targets ranging from $69 to $115. According to InvestingPro data, 12 analysts have recently revised their earnings expectations downward for the upcoming period.

The investment bank noted that Starbucks’ fourth fiscal quarter is "unlikely to beat or mark a major step forward," citing the late-quarter rollout of Green Apron Service, an industry-wide slowdown in September, and recent announcements about product changes and store closures that will affect fiscal year 2026. With the company’s next earnings report due in 9 days, InvestingPro analysis indicates the stock is trading at a relatively high P/E ratio of 37.18x, suggesting elevated market expectations despite current challenges.

Morgan Stanley indicated the coming few quarters will be a "key proof point in SBUX’s turnaround" as several major initiatives are now in place, and previous tests will need to translate into financial results for bullish investors to remain engaged.

The firm has trimmed its earnings estimates to reflect recent trends, cost adjustments, and U.S. store closures announced in late September, while noting that Starbucks is not expected to provide its usual annual guidance during the upcoming earnings cycle.

Morgan Stanley identified additional catalyst points including a potential China business sale that "seems close" and an upcoming investor day around the next earnings release, which should clarify the company’s "vision for the next few years."

In other recent news, Starbucks Corporation announced a modest increase in its quarterly dividend, raising it from $0.61 to $0.62 per share, which represents a 1.6% increase. This adjustment will be payable on November 28, 2025, to shareholders on record as of November 14, 2025, marking the company’s fifteenth consecutive annual dividend increase. Additionally, Starbucks unveiled a significant $1 billion restructuring plan, which includes closing stores across North America and is expected to result in a 1% decline in net unit growth for fiscal year 2025. Despite these changes, Stifel has maintained its Buy rating on Starbucks, reiterating a $105.00 price target. Meanwhile, TD Cowen has lowered its price target for the company to $84.00, citing concerns over anticipated sales turnaround not materializing. In another development, Starbucks’ Chief Technology Officer, Deb Hall Lefevre, has stepped down, with Ningyu Chen named as the interim replacement. These recent developments highlight ongoing strategic adjustments within the company.

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