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Investing.com -- BTIG said Starbucks’ latest turnaround measures highlight that progress is taking more time than expected, even as the firm reaffirmed its Buy rating with a $105 price target.
The coffee chain announced plans to close about 500 locations in North America as part of its restructuring, alongside a further reduction in corporate staff.
BTIG noted, “We remain Buy-rated with a $105 price target, but acknowledge the turnaround here is taking longer than we initially anticipated.
“We are encouraged by the longer-tail portfolio restructuring and further cost reductions, and we eagerly await a return to positive transaction counts in the U.S. as the ultimate catalyst.”
According to BTIG, the closures represent “about 4.5% of the company-owned North American portfolio” and should be completed in the coming days.
The firm estimated roughly 500 stores will shut, following management’s broad review, and said the targeted units appear diverse but often share “limited or no in-store seating.”
According to the firm, drive-thru, in-store, and mobile order-capable sites are less likely to be affected, with previously announced mobile-order-only stores also set to close.
Starbucks will also cut 900 corporate roles, equal to about 10% of its remaining non-retail staff.
BTIG said this follows earlier reductions and leaves “roughly 20% less [staff] than at the beginning of FY25.” The company expects about $1 billion in charges related to closures and restructuring, with 90% tied to North America.
BTIG trimmed its near-term EPS estimate, lowering 4QF25 to $0.61 from $0.69 and FY26 to $2.76 from $2.98. Still, the firm said its valuation remains based on “a 32.0x P/E multiple…given current traffic recovery and turnaround potential.”