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On Wednesday, Stifel analysts adjusted their outlook on Starbucks (NASDAQ:SBUX) shares, lowering the price target to $92 from the previous $103, while maintaining a Buy rating on the company’s stock. The revision follows Starbucks’ second-quarter results, which presented a mix of outcomes compared to Stifel’s projections. With a current market capitalization of $89.8 billion and trading at a P/E ratio of 25.5, InvestingPro data shows the stock is currently trading near its Fair Value. Although North American and International comparable sales surpassed expectations, the North American segment margin fell short.
The analysts have shifted their focus away from short-term U.S. comparable sales and margin performance, directing their attention instead to Starbucks’ initiatives that aim to improve both customer and employee experiences. A key component of these initiatives is the introduction of the Green Apron service model. This new model is designed to optimize labor and incorporate a reengineered order sequencing algorithm. Early testing of the Green Apron concept has yielded promising results, with a reduction in wait times by two minutes and a significant 75% of café orders being fulfilled within four minutes during peak periods. The company, which generates annual revenue of $36.3 billion, has maintained its position as a prominent player in the Hotels, Restaurants & Leisure industry, according to InvestingPro analysis.
Starbucks plans to sustain sales momentum by launching new beverages and programs that drive demand. However, Stifel has adjusted their estimates for the coffee giant, taking into account a softer outlook for U.S. comparable sales, reduced margins, and an anticipated slowdown in U.S. net unit growth over the coming years. These revised estimates reflect a cautious stance on the near-term financial performance of Starbucks, even as the company continues to innovate and refine its service model. Despite recent challenges, including a 12.1% decline in share price over the past six months, the company maintains a solid 2.88% dividend yield and has raised its dividend for 15 consecutive years. For deeper insights into Starbucks’ financial health and growth prospects, investors can access the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Starbucks Corporation reported its second-quarter earnings for 2025, revealing a decline in earnings per share (EPS) to $0.41, missing the forecast of $0.51. The company’s revenue reached $8.8 billion, slightly below the anticipated $8.89 billion, while global comparable store sales decreased by 1%. Following these results, several analysts adjusted their price targets for Starbucks. BTIG lowered its target from $115 to $105, maintaining a Buy rating, while JPMorgan reduced its target to $100, keeping an Overweight rating. Evercore ISI also revised its price target to $95, although it retained an Outperform rating, citing long-term growth potential.
KeyBanc Capital Markets maintained a Sector Weight rating but adjusted its earnings projections, reflecting Starbucks’ challenges with same-store sales growth and profitability. Starbucks has been implementing strategic changes, including focusing on labor investments to enhance service times, instead of capital-heavy equipment upgrades. Despite these efforts, the company anticipates continued negative same-store sales trends in the near term. Analysts noted that Starbucks is in a multi-year recovery period and emphasized the importance of its strategic investments for future growth.
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