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Investing.com -- Bernstein analysts remain bullish on Starbucks (NASDAQ:SBUX), stating the stock could double from its post-second quarter lows as the company executes a multi-year turnaround.
In a note Wednesday, Bernstein reiterated its Outperform rating and raised its price target for SBUX $100 from $90 a share, citing improved visibility into labor investments, margin recovery, and earnings growth.
“The recent disclosures validate our expectations of Starbucks’ labor investment to be $1.5B to $2B in the next 2 years,” Bernstein wrote.
The firm expects Starbucks to add one employee per store across 7,000 locations and expand labor hours per worker by 8% by fiscal 2027.
These efforts, according to Bernstein, will be “pivotal to reduce turnover (hence lower training cost and greater store productivity)” and eventually “drive traffic back in the stores,” particularly as consumers respond to faster service and improved hospitality.
While negative traffic is still expected in North America through fiscal 2025, Bernstein forecasts a rebound beginning in 2026, with same-store sales accelerating to 5% in 2027-28.
The analysts see a return to 19% EBIT margins in North America and 15.3% at the company level by 2028, opening a path to $4.30 in EPS.
“We continue to believe the stock could double since the lows reached post 2Q25 results,” the note said.
Even after a 15% rebound since those lows, Bernstein believes “the stock could cumulatively gain another 35% in the next ~2 years,” supported by EPS growth of 20%+ and a premium multiple of 30x.
The firm added that Starbucks’ share price growth will likely be “at a faster pace than the S&P500.”