Coffee giant Starbucks (SBUX) is scheduled to announce its results for the first quarter of Fiscal 2026 on Wednesday, January 28. Wall Street is cautiously optimistic on SBUX stock ahead of Q1 FY26 earnings. While bulls expect SBUX’s performance to improve, driven by its turnaround efforts, other analysts are concerned about high coffee and labor costs as well as weakness in key markets. According to TipRanks’ Options Tool, options traders expect about an 8.08% move in either direction in SBUX stock in reaction to Q1 FY26 results.
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This implied move is higher than SBUX stock’s average post-earnings move (in absolute terms) of 3.81% over the past four quarters.
Meanwhile, Wall Street expects Starbucks to report earnings per share (EPS) of $0.58 for Q1 FY26, reflecting a 16% year-over-year decline. Revenue is expected to increase by 2.6% to $9.64 billion.
Interestingly, Starbucks reported global same-store sales growth of 1% in Q4 FY25 after six consecutive quarters of decline. However, the company’s Q4 FY25 EPS lagged the Street’s expectations due to higher costs.
Analysts’ Views Ahead of Starbucks’ Q1 Earnings
Heading into Q1 FY26 earnings, William Blair analyst Sharon Zackfia upgraded Starbucks to Buy from Hold. Zackfia expects Starbucks to deliver its first U.S. comparable sales growth in two years in Q1 FY26, positioning the brand for a return to positive full-year comparable gains. However, Zackfia thinks that the crucial question at this point is the “path and timeline” for margin recovery amid elevated labor expenses in Fiscal 2026. The analyst expects management to provide more insights at SBUX’s inaugural investor day on January 29. Zackfia expects the company to reveal a multi-year path that involves both general and administrative (G&A) expenses efficiencies and productivity gains, coupled with consistent comparable sales growth.
Zackfia contends that while some of the optimism about Starbucks’ recovery is already priced into the stock’s 15% year-to-date increase, a “credible case exists for the stock to reach more than $140 by 2029, assuming a 30-times P/E multiple off a 2030 estimate of more than $4.70.” She sees potential for upside if comparable sales growth accelerates further.
In contrast, Jefferies analyst Andy Barish reiterated a Sell rating on Starbucks stock with a price target of $75. The analyst views the year-to-date rise in SBUX stock as “an unsupported rally” ahead of Q1 FY26 results and the Analyst Day event, which he thinks could “disappoint & overpromise.” While Barish agrees that Starbucks CEO Brian Niccol and team are moving in the right direction, he still doesn’t see a clear path to sustainable mid-single-digit same-store sales growth or mid-to-high-teens operating margins over the next few years, which are needed to justify the current valuation — especially with growth expected to slow down.
AI Analyst Is Cautious on SBUX Stock
TipRanks’ AI Analyst has a Neutral rating on Starbucks stock, with a price target of $101 indicating an upside potential of 4.3%. The AI Analyst noted that solid revenue growth and favorable earnings call insights are offset by high leverage, declining margins, and a high valuation. Furthermore, technical indicators suggest a bearish trend.
Is Starbucks Stock a Buy, Sell, or Hold?
Currently, Wall Street has a Moderate Buy consensus rating on Starbucks stock based on 13 Buys, seven Holds, and two Sell recommendations. The average SBUX stock price target of $98.22 indicates shares are fully priced at current levels.
