Jefferies has raised its price target for Starbucks to $86.00 from $76.00, while keeping an Underperform rating on the coffee chain's shares. The firm said the revised target acknowledges recent improvements in same-store sales, even as it maintains skepticism about the stock's near-term upside.
Starbucks shares were trading at $95.12, reflecting a market capitalization of $109.05 billion and a price-to-earnings ratio of 59.05, according to InvestingPro data. Jefferies' move to lift the target comes after the company released comparable-sales figures that Jefferies described as showing "solid improvement," but the research note emphasized that some of those gains benefited from "very easy laps and benefits from closed stores, expanded hours, and more marketing."
Company-reported metrics show revenue growth of 2.79% over the last twelve months. Starbucks provided fiscal 2026 guidance that calls for 3%+ comparable sales growth, a mark Jefferies interprets as signaling improved two-year trends ahead. The guidance lines up with InvestingPro's revenue growth forecast of 3% for fiscal 2026 and with analyst expectations for earnings per share of $2.33 for the year.
Despite the improved same-store sales backdrop, Jefferies pointed to several areas of concern. The research firm flagged that both unit growth and the margin outlook came in lower than expected for the year, and it highlighted "low visibility into cost-saves." Those dynamics prompted Jefferies to reduce its earnings-per-share estimates for fiscal 2026 and fiscal 2027, though the firm did not change its overall rating.
Jefferies said the price-target increase was intended in part to "acknowledge better same-store sales" results, even while its view of the stock's relative attractiveness remains cautious.
Starbucks' latest quarterly results offered a mixed picture that helps explain the divergent analyst responses. For the first quarter of fiscal 2026, the company reported revenue of $9.9 billion, topping an anticipated $9.62 billion. At the same time, earnings per share were $0.56, short of the $0.59 forecast and representing an 18% decline from the prior year.
Evercore ISI continued to hold a more favorable stance, maintaining an Outperform rating on the stock with a $105 price target. Evercore noted that Starbucks' reported EPS exceeded the firm's own estimate of $0.51. Meanwhile, Starbucks' consolidated operating margin was recorded at 10.1%, down 180 basis points compared with the year-ago period.
These juxtaposed data points and analyst reactions underscore the nuanced market debate over how sustainable recent revenue gains are, and how margin pressures and lower-than-expected unit growth could shape earnings in the coming fiscal years.
Summary of the situation:
- Jefferies raised its price target to $86 while retaining an Underperform rating.
- Company trading metrics include a $95.12 share price, $109.05 billion market capitalization and a 59.05 P/E ratio per InvestingPro data.
- Fiscal 2026 guidance calls for 3%+ comparable sales growth; InvestingPro forecasts 3% revenue growth and analysts expect $2.33 in EPS for fiscal 2026.