Valued at a market cap of $120.3 billion, Starbucks Corporation (SBUX) is a global specialty coffee retailer, roaster, and marketer headquartered in Seattle, Washington. The company operates more than 41,000 company-operated and licensed coffeehouses across approximately 90 markets worldwide. Its product portfolio includes handcrafted coffee, espresso beverages, teas, refreshers, pastries, sandwiches, and packaged coffee products.
This coffee retailer has outperformed the broader market over the past 52 weeks. Shares of SBUX have gained 24.7% over this time frame, while the broader S&P 500 Index ($SPX) has soared 11.1%. Moreover, on a YTD basis, the stock is up 23.1%, outpacing SPX’s 10.7% rise.
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Narrowing the focus, SBUX has also outpaced the State Street Consumer Discretionary Select Sector SPDR ETF’s (XLY) 1.3% downtick over the past 52 weeks and 3.4% YTD drop.
www.barchart.com Starbucks delivered its fiscal 2027 fourth-quarter 2026 results on Oct. 29, with its turnaround strategy gaining traction through improving customer traffic, stronger comparable sales, and significant margin expansion. Revenue fell 4.5% year over year to $9.14 billion. Profitability improved considerably, with adjusted EPS jumping 53.8% to $0.80, comfortably exceeding analysts' expectations of $0.73. The improvement reflected stronger sales leverage, lower restructuring expenses, and ongoing cost-saving initiatives.
Global comparable sales increased 7.2%, marking the company's fifth consecutive quarter of positive growth. North America led the recovery, with comparable sales climbing 7.9%, supported by a 2.4% increase in transactions and a 5.2% rise in average ticket. Starbucks Rewards also reached a record 36 million active 90-day members, highlighting stronger customer engagement. Looking ahead, Starbucks expects its turnaround to continue in fiscal 2027, targeting approximately 4% North American comparable sales growth and adjusted EPS of $3.15 to $3.25. The company also plans to add approximately 1,200 net stores globally and invest in more than 2,000 coffeehouse upgrades. Investors seemed impressed and sent its shares up 2.2% after the announcement.
For the current fiscal year, ending in September 2027, analysts expect SBUX’s EPS to grow 18% year over year to $3.21. The company’s earnings surprise history is disappointing. It missed the consensus estimates in three of the last four quarters, while missing on another occasion.
Among the 35 analysts covering the stock, the consensus rating is a "Moderate Buy,” which is based on 12 “Strong Buy,” two “Moderate Buy,” 17 “Hold,” one “Moderate Sell,” and three “Strong Sell” ratings.
www.barchart.com The configuration is bearish than two months ago, with 13 analysts suggesting a "Strong Buy” rating.
Recently, Bank of America raised its price target on Starbucks to $141 from $136, maintaining a “Buy” rating, citing continued improvement in customer traffic trends, although momentum has moderated from earlier stages of the turnaround. Similarly, Baird lifted its price target to $120 from $115 while reiterating an “Outperform” rating, noting early signs of improving operating leverage.
The mean price target of $109.47 indicates a 5.6% potential upside from the current levels. The Street-high target of $141 implies an upswing potential of 36%.
On the date of publication, Kritika Sarmah did not directly have a position in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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