Starbucks stock price target lowered to $100 by RBC on cost savings uncertainty

Investing.com - RBC Capital lowered its price target on Starbucks (NASDAQ:SBUX) to $100 from $110 on Thursday, while maintaining an Outperform rating on the coffee chain’s stock. Starbucks currently trades at $85.04, significantly below its 52-week high of $117.46, with a P/E ratio of 36.43, indicating the stock is trading at a premium valuation according to InvestingPro data.

The price target reduction comes despite RBC noting "solid sequential improvements" in the U.S. market and positive same-store sales that exceeded expectations in both North America and international segments.

RBC highlighted that Starbucks’ recent U.S. labor investments appear to be driving continued transaction acceleration, with U.S. same-store sales accelerating to approximately 1% in September, driven by transactions, and further improving into October. This modest growth comes as the company maintains a 2.95% dividend yield and has raised dividends for 16 consecutive years, though 12 analysts have recently revised earnings downward for the upcoming period.

The firm pointed out this growth occurred during a period when "other restaurants have alluded to weakening industry demand," suggesting Starbucks is outperforming broader restaurant industry trends.

The lower price target primarily reflects management providing "little incremental color on cost savings" mentioned during the third-quarter call, which RBC indicates "could result in a wide range of investor expectations" until Starbucks provides fiscal year 2026 guidance and long-term targets at its January investor day.

In other recent news, Starbucks reported its fourth-quarter 2025 earnings, revealing a mixed financial performance. The company fell short of analysts’ expectations for earnings per share, posting $0.52 against the projected $0.56. However, Starbucks exceeded revenue forecasts, generating $9.57 billion compared to the anticipated $9.35 billion. Following the earnings announcement, Piper Sandler adjusted its price target for Starbucks to $100, down from $105, while maintaining an Overweight rating. The firm highlighted a modest recovery in U.S. same-store sales, which were approximately flat but met investor expectations. Meanwhile, Bernstein reiterated its Outperform rating with a $100 price target, noting positive results from the Green Apron model implemented in August. This model has contributed to growth in comparable sales during September and October. These recent developments come as Starbucks shows early signs of recovery in its North American operations.

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