BMO Capital reiterated an Outperform rating and a $115.00 price target for Starbucks (NASDAQ:SBUX) after the company posted an earnings-per-share miss for the first quarter of fiscal 2026. The stock was trading at $94.23, which BMO said implies roughly 22% upside to its target, while Starbucks’ price-to-earnings ratio stood at 79.7.
Starbucks reported EPS of $0.56 for the quarter versus a consensus expectation of $0.59, according to BMO Capital. BMO attributed the shortfall to continued reinvestment tied to the company’s turnaround strategy, rather than an outright deterioration in top-line fundamentals.
Despite the EPS miss, BMO highlighted signs of operational progress. The firm pointed to accelerating comparable sales momentum and a return to U.S. transaction growth as indications that the turnaround is gaining traction. InvestingPro data referenced by BMO showed that nine analysts have revised earnings estimates downward for the upcoming period, signaling some analyst caution even as sales trends improve.
Starbucks has provided fiscal 2026 guidance that calls for global and U.S. comparable sales growth of 3% or more, and earnings per share in a range of $2.15 to $2.40. Management has signaled that the recovery in earnings will lag the improvement in sales, and that margin pressures are expected to ease in the second half of fiscal 2026.
Over the last twelve months Starbucks recorded revenue growth of 4.3%, taking trailing twelve-month revenue to $37.7 billion. BMO said it continues to "gain confidence in turnaround" work at the company, and that its focus is now shifting to the details of Starbucks’ growth algorithm and the multi-year path for earnings recovery, ahead of an Investor Day scheduled for tomorrow.
The company yields 2.61% on its dividend and, according to the InvestingPro reference cited by BMO, is trading near its InvestingPro Fair Value. BMO’s note references a fuller Pro Research Report that provides deeper analysis on Starbucks and a broad set of other large-cap names.
Additional results and corporate developments from Starbucks were reiterated in the updates: first-quarter revenue reached $9.9 billion, topping expectations of $9.7 billion even as EPS came in at $0.56 versus the $0.59 consensus. Starbucks plans to launch a revamped Starbucks Rewards program on March 10. The program will introduce a three-tier membership structure aimed at enhancing benefits for the company’s roughly 38 million active members in North America.
During an investor day presentation the company outlined a longer-term growth framework, projecting at least 3% comparable sales growth through fiscal 2028 and target operating margins in a band of 13.5% to 15%.
Analyst responses were mixed. Goldman Sachs maintained a Neutral rating on Starbucks. Jefferies increased its price target to $86 but left an Underperform rating in place while pointing to what it called "solid improvement" in same-store sales. Evercore ISI reiterated an Outperform rating and a $105 price target, noting that Starbucks’ EPS was slightly below consensus but above Evercore ISI’s own estimate.
With the company emphasizing sales recovery ahead of margin rebound, investor attention will likely center on the specifics management provides around its growth algorithm and the timeline for restoring earnings power at the Investor Day. BMO’s continued positive stance reflects its view that improving comp-sales trends and returning transaction growth in the U.S. support a favorable medium-term outlook, even as near-term profitability is affected by ongoing reinvestment.