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Starbucks price target raised to $95 from $90 at TD Cowen on lower labor costs

Published 30/07/2025, 15:38
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Investing.com - TD Cowen has raised its price target on Starbucks (NASDAQ:SBUX) stock to $95.00 from $90.00 while maintaining a Hold rating. The coffee giant, currently trading at $91.78 with a market cap of $104.41B, commands a P/E ratio of 32.84, suggesting a premium valuation according to InvestingPro analysis.

The firm adjusted its 2026-2028 earnings per share estimates upward based on expectations for lower labor investments than previously anticipated.

TD Cowen noted that Starbucks management outlined a "wave of innovation" aimed at achieving the 4% North America same-store sales growth reflected in 2026 consensus estimates.

This innovation strategy includes improved operations, consistent beverage innovation, and an accelerated pace of store remodels.

The firm highlighted that Starbucks’ guidance for $500 million in labor investments is lower than TD Cowen’s previous estimate of over $700 million, though concerns remain about consensus earnings estimates for 2026-2028 amid what the firm describes as elevated valuation.

In other recent news, Starbucks Corporation reported its financial results for the third quarter of 2025, showing a mixed performance. The company missed earnings per share (EPS) expectations, reporting $0.50 compared to the forecast of $0.65, resulting in a 23.08% negative surprise. However, Starbucks exceeded revenue expectations, bringing in $9.5 billion, which was higher than the projected $9.29 billion by 2.26%. In addition to these financial results, Stifel reiterated its Buy rating on Starbucks stock, maintaining a price target of $105.00. The firm noted significant progress in the company’s "Back to Starbucks" turnaround initiative, emphasizing operational changes and a strong innovation pipeline. These recent developments highlight both challenges and opportunities for Starbucks as it navigates its strategic objectives.

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