Why Starbucks stock is ripe for a 30% pop and a new era of growth: Analyst

Starbucks stock ( SBUX ) could percolate later in 2025 as the coffee chain brews better financial performances under new CEO Brian Niccol after a challenging 2024, longtime Starbucks watcher Peter Saleh said.

In Saleh's eyes, a focus by Niccol — who took over as CEO in September 2024 — on faster service times, simpler pricing, and better store operations are the ingredients to reestablish Starbucks shares as a top performer.

"We believe that progress against these initiatives in 2025 will set the stage for outsized same-store sales and earnings growth in 2026 and beyond, catalyzing shares as we progress through the year and that recovery trajectory emerges," Saleh, the BTIG restaurant analyst, wrote in a note on Thursday.

Saleh named Starbucks one of his top first-half 2025 picks, assigning a $115 price target. The target assumes about 30% upside from current levels.

The average sell-side price target on Starbucks is currently $103, Yahoo Finance data shows .

"We expect 2025 will be a transition and investment year for Starbucks, as management has suspended guidance, slowed development, and reset operations to engineer a sustainable turnaround," Saleh wrote, hinting Starbucks' rebound won't be smooth sailing this year.

That notion is underscored by Starbucks' stretch of less-than-caffeinated financial results.

Starbucks' most recent quarter showed a 7% drop in global comparable-store sales as consumers shunned the chain's ever-pricier coffees and long wait times. North America comparable store sales tanked 6%.

International sales plunged 9%, and Chinese comparable sales cratered 14%. Non-GAAP operating profit margins fell 380 basis points from the prior year to 14.4%.

"I would love to see the foot traffic start to turn around to drive that same-store sales growth. ... That's going to be a key piece of the puzzle for us going forward," Niccol told Yahoo Finance about the US business in a Nov. 4 interview (video above).

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Starbucks shares ended 2024 down 5% compared to a 23% advance for the S&P 500 ( ^GSPC ). McDonald's ( MCD ) shares finished the year up slightly.

Starbucks shares — which for years have traded at relative premiums to competitors — trade on a trailing 12-month price-to-sales ratio of 2.87 times. That is below fellow coffee purveyors McDonald's ( MCD ) at 8.1 times and Dutch Bros ( BROS ) at 4.1 times, according to Yahoo Finance's stock comparison tool .

"They obviously got an amazing pick," Brinker International CEO Kevin Hochman told Yahoo Finance about his former Yum! Brands colleague. "He's going to do his normal Brian Niccol magic. And I can't wait to see what they're going to be about."