Starbucks stock price target raised to $115 at BMO Capital

On Wednesday, BMO Capital Markets expressed increased confidence in Starbucks Corporation’s (NASDAQ:SBUX) ongoing turnaround efforts, leading to a raised price target on the company’s shares. The new target is set at $115.00, up from the previous $110.00, while the firm continues to endorse an Outperform rating for the coffee giant’s stock, which has seen an impressive 35.16% price return over the past six months. According to InvestingPro data, analyst targets for the $114 billion company range from $76 to $125, reflecting diverse views on its valuation.

Starbucks has recently shown early signs of progress that suggest a potential for positive comparable store sales as early as the second fiscal quarter of 2025. BMO Capital’s analysis acknowledges the temporary impact of investments and restructuring charges on earnings per share (EPS), but anticipates these to be short-lived. The firm’s optimism is fueled by Starbucks’ promising earnings potential in the upcoming years, as a sales recovery is expected to take hold. InvestingPro’s financial health assessment rates Starbucks as ’GOOD,’ with particularly strong scores in profitability metrics.

The company’s financial performance in the first fiscal quarter of 2025 has already surpassed expectations, with an EPS of $0.69, which is above the consensus estimate of $0.67. This beat was attributed to better-than-anticipated comparable store sales. Despite projecting a dip in EPS for the second fiscal quarter due to ongoing investments and restructuring efforts, Starbucks anticipates this period to mark the lowest point in its earnings.

BMO Capital’s revised price target reflects a belief in the strength of Starbucks’ recovery trajectory and its ability to generate increased sales. The firm’s commentary underscores a strategic view that the current phase of investment and restructuring, though temporarily dampening EPS, will lead to robust growth and profitability in the foreseeable future.

In other recent news, Starbucks Corporation has been at the center of several noteworthy developments. The company reported a 4.0% decline in U.S. same-store sales, a better outcome than market consensus. Piper Sandler maintained a $110 target on Starbucks stock, expressing confidence in its potential for growth and stability. Similarly, Bernstein SocGen Group and RBC Capital Markets reiterated an Outperform rating with price targets of $115. Stifel analysts held firm on their Buy rating for Starbucks stock, raising the target to $114. However, Jefferies analyst Andy Barish maintained an Underperform rating on Starbucks stock, expressing concerns about the core business. Starbucks is also testing a new order sequencing algorithm at pilot locations to streamline service. Lastly, Alshaya Group, a Kuwait-based conglomerate, paused discussions regarding the sale of a stake in its Starbucks Corp . franchise. These are all recent developments providing investors with insights into Starbucks’ operational and financial landscape.

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