Stifel raises Starbucks stock price target to $114

On Monday, Stifel analysts showed optimism for Starbucks stock (NASDAQ:SBUX), as they increased the price target to $114 from the previous $110, while reiterating a Buy rating. With the stock trading near its 52-week high and sporting a market capitalization of $112.23 billion, InvestingPro data indicates the shares are slightly overvalued at current levels. The firm anticipates an uptick in U.S. comparable sales and suggests that recent mobile location data indicates a slight improvement in visitation trends since October. Despite expectations of a weak fiscal first quarter U.S. comparable sales performance, with Stifel projecting a 6.0% decline and the Street forecasting a 5.2% drop, the firm maintains a positive outlook.

The analysts expect Starbucks to report its fiscal first quarter earnings after the market closes on Tuesday, and they believe the stock is positioned to gain value, especially if it dips due to concerns over coffee tariffs. Notably, InvestingPro data shows that 8 analysts have recently revised their earnings expectations downward for the upcoming period, with the stock currently trading at an EV/EBITDA multiple of 20x. They argue that the potential for sequential improvement in U.S. comparable sales should drive share appreciation in the coming months.

Stifel's analysis has led them to conclude that the customer and employee experience at Starbucks can be enhanced within quarters rather than years, which could positively impact the overall guest experience. The firm is encouraged by the initial changes Starbucks has implemented and foresees several potential adjustments that could be made in the next few months to boost transactions.

The discussion among investors centers on the time frame required to improve the customer and employee experience. Stifel aligns with those who believe that significant improvements can be achieved in a shorter period. The firm's stance is backed by the early signs of progress they have observed.

In summary, Stifel's revised price target reflects a confidence in Starbucks' potential for sales improvement and operational enhancements. The firm's analysis suggests that strategic changes in the near term could lead to increased customer transactions and a stronger performance for the company's shares. With modest revenue growth of 0.56% over the last twelve months and a P/E ratio of 29.8x, investors seeking deeper insights into Starbucks' valuation and growth prospects can access comprehensive analysis through InvestingPro's detailed research reports, which cover over 1,400 top US stocks.

In other recent news, Starbucks has seen a series of developments that could potentially impact its future operations. The company has announced a new phase in its ongoing initiative, "Back to Starbucks," aiming to transform its support organization, which may streamline processes and improve efficiency across operations. On the other hand, Alshaya Group, a Kuwait-based conglomerate, has paused discussions regarding the sale of a stake in its Starbucks Corp . franchise.

Starbucks has also been in the spotlight due to a potential tariff scare, with concerns about the cost of coffee imports following President Trump's threat of tariffs on Colombian exports. Analysts from TD Cowen and Stifel offered differing perspectives on the situation, suggesting varying impacts on the company's financials.

Deutsche Bank (ETR:DBKGn) has reiterated its Buy rating for Starbucks shares, based on insights from its proprietary survey, indicating a slight decline in customer concerns over pricing. This suggests an improvement in the coffee chain's value perception.

In a significant leadership change, Mellody Hobson, a member of Starbucks' board of directors, has decided not to seek reelection at the upcoming Annual Meeting of Shareholders. Lastly, Starbucks' Board of Directors has approved a quarterly cash dividend of $0.61 per share on the company's outstanding Common Stock. These recent developments offer investors an insight into the company's operational and financial landscape.

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