Starbucks Stock Shines as Analysts Mull Early Merits of Turnaround Plan

Key Takeaways

Starbucks ( SBUX ) shares have moved higher Wednesday as some analysts seem to be buying in—albeit cautiously—on new Chief Executive Officer Brian Niccol’s “ Back to Starbucks ” turnaround plan.

“The pace of change is accelerating at Starbucks,” JPMorgan analysts said in a research report Wednesday, pointing to a narrower-than-expected 4% decline in global same-store sales in the company’s fiscal first quarter. The firm holds an “overweight” rating and a $105 price target , encouraging investors to “focus on the improving momentum in the business which should carry shares higher.”

The JPMorgan target is below Starbucks’ recent Wednesday level after shares jumped nearly 9% to $108.99

Niccol, who took the reins in September, has implemented the “Back to Starbucks” turnaround strategy that has included the reinstatement of a policy requiring customers to make a purchase if they want to spend time in the company’s cafes or use its bathrooms.

Some Analysts Are More Bearish

Jefferies analysts had a more bearish stance, seeing “[n]o early signs of meaningful improvement” in same-store sales or traffic trends. The firm on Wednesday wrote that it expects Starbucks ' current woes "to last longer than most investors expect" but said the company should benefit "eventually" from strategic changes now underway. Jefferies maintained its “underperform” rating and price target of $76.

Oppenheimer analysts, taking a more Goldilocks approach, said, “Our thesis [is] to remain on the sidelines,” reiterating a neutral “perform” rating. Starbucks has a “favorable setup” under Niccol, but “we struggle to identify a clear path” for same-store sales, margin , and earnings per share improvement, said Oppenheimer.

On the company's earnings call Tuesday, CFO Rachel Ruggeri said Starbucks expects that year-over-year earnings pressure could "intensify" in the current quarter, before improving in the second half of fiscal 2025.

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