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Starbucks (SBUX)
NASDAQ:SBUX

Starbucks (SBUX) AI Stock Analysis

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Starbucks

(NASDAQ:SBUX)

Rating:73Outperform
Price Target:
$105.00
▲(11.18%Upside)
Starbucks' overall stock score reflects strong revenue growth and strategic initiatives aimed at improving customer experience and operational efficiency. However, financial risks due to high leverage and declining margins, along with a high valuation, temper the positive outlook. The company's strategic focus on stabilization and recovery in key markets is promising, but financial performance needs to improve for a stronger score.
Positive Factors
Labor Investment
Starbucks' labor investment of $1.5B to $2B is expected to reduce turnover, lower training costs, and increase store productivity.
Same Store Sales Growth
Analysts expect accelerated growth in Starbucks' same store sales to 5% as the company unlocks traffic growth opportunities with better pricing, innovation, and improved store ambiance.
Negative Factors
Economic Headwinds
Starbucks would likely face pressure on achieving sustainable profitability in the medium term due to growing economic headwinds and keen competition from fast-growing local coffee and tea chains.
Profitability Concerns
There is uncertainty about long-term profitability as sales are prioritized over margins in the turnaround strategy.

Starbucks (SBUX) vs. SPDR S&P 500 ETF (SPY)

Starbucks Business Overview & Revenue Model

Company DescriptionStarbucks Corporation, together with its subsidiaries, operates as a roaster, marketer, and retailer of specialty coffee worldwide. The company operates through three segments: North America, International, and Channel Development. Its stores offer coffee and tea beverages, roasted whole beans and ground coffees, single serve products, and ready-to-drink beverages; and various food products, such as pastries, breakfast sandwiches, and lunch items. The company also licenses its trademarks through licensed stores, and grocery and foodservice accounts. The company offers its products under the Starbucks, Teavana, Seattle's Best Coffee, Evolution Fresh, Ethos, Starbucks Reserve, and Princi brands. As of October 3, 2021, it operated 16,826 company-operated and licensed stores in North America; and 17,007 company-operated and licensed stores internationally. The company was founded in 1971 and is based in Seattle, Washington.
How the Company Makes MoneyStarbucks primarily generates revenue through its company-operated stores, which account for a significant portion of its total earnings. These stores sell a variety of products including beverages, food items, and merchandise. Licensed stores also contribute to Starbucks' revenue through licensing fees and royalties for using the Starbucks brand. Additionally, Starbucks sells consumer packaged goods and ready-to-drink beverages through various channels including grocery stores, convenience stores, and other retail locations, further diversifying its revenue streams. The company's strategic partnerships, such as its collaboration with Nestlé to distribute Starbucks-branded products globally, also play a crucial role in expanding its market presence and enhancing revenue growth.

Starbucks Key Performance Indicators (KPIs)

Any
Any
Store Count
Store Count
Tracks the number of Starbucks locations globally, indicating market penetration, brand expansion, and potential for revenue growth.
Chart InsightsStarbucks' store count has steadily increased, surpassing 40,000 locations by late 2024. However, the latest earnings call reveals a strategic pivot to temporarily slow unit growth to optimize store economics and build costs. Despite financial challenges, including a decline in U.S. comparable store sales, Starbucks is focusing on enhancing customer experience and operational efficiency through its 'Back to Starbucks' strategy. This shift aims to strengthen brand sentiment and improve margins, with early signs of recovery in North America and positive trends in international markets.
Data provided by:Main Street Data

Starbucks Earnings Call Summary

Earnings Call Date:Apr 29, 2025
(Q2-2025)
|
% Change Since: 12.08%|
Next Earnings Date:Aug 05, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant improvements in employee engagement and customer experience, particularly in North America, and a positive recovery in international markets. However, the financial performance was disappointing, with declines in sales and margins, indicating that while strategic changes are taking hold, the financial recovery is still in its early stages.
Q2-2025 Updates
Positive Updates
Positive Indicators in North America
Partner engagement is up, turnover has dropped to under 50%, and customer experience continues to improve. Canadian business has returned to positive comps with positive transaction growth.
Labor and Algorithm Pilot Success
The combination of staffing, deployment, and technology has improved speed of service and connection while growing transactions, with in-cafe wait times reduced by two minutes.
Engagement and Brand Sentiment Improvement
Non-Starbucks Rewards member traffic is stabilizing, market share and brand sentiment are improving, and customer contact regarding wait times is decreasing.
International Market Recovery
Eight of the top 10 international markets returned to flat comp or comp growth, with notable improvements in the UK, Middle East, and Japan.
Negative Updates
Disappointing Financial Results
Total company revenue was $8.8 billion with a global comparable store sales decline of 1%, a global operating margin of 8.2%, and overall earnings per share of $0.41, down 38% from the prior year.
US Comparable Store Sales Decline
US comparable store sales declined by 2%, with transaction decline improving to negative 4%.
Margin Compression
Q2 consolidated operating margin was 8.2%, contracting 450 basis points from the prior year, primarily due to deleverage and additional labor in support of the Back to Starbucks strategy.
Company Guidance
During the Starbucks Second Quarter Fiscal Year 2025 Conference Call, the company provided guidance reflecting both challenges and strategic initiatives. Starbucks reported total revenue of $8.8 billion, a global net new store growth of 213 coffeehouses, and a global operating margin of 8.2%, with earnings per share (EPS) at $0.41. These figures were noted as being below expectations, largely attributed to a 1% global comparable store sales decline, including a 2% decline in the U.S. The company emphasized its "Back to Starbucks" strategy, focusing on enhancing customer experience, investing in labor rather than equipment, and simplifying the menu to improve operational efficiency. Starbucks also highlighted early signs of recovery in North America, with partner engagement up and turnover dropping to a recorded low of under 50%. Internationally, eight of the top ten markets returned to flat or positive comps, with significant progress in Canada and Japan. As part of its strategic pivots, Starbucks plans to slow its unit growth temporarily to focus on optimizing store economics and build costs, while reinforcing its brand through targeted marketing efforts and innovation in product offerings.

Starbucks Financial Statement Overview

Summary
Starbucks shows strong revenue growth and cash flow generation. However, high leverage and declining net profit margins indicate financial risks. The company must improve profitability and reduce financial leverage to enhance stability.
Income Statement
75
Positive
Starbucks demonstrates strong revenue growth with a 12.7% increase in total revenue from 2022 to TTM (Trailing-Twelve-Months). The gross profit margin is robust at 36.5% for the TTM, indicating efficient cost management. However, the net profit margin has slightly decreased to 8.6% in TTM, reflecting potential challenges in controlling non-operating expenses. The EBIT margin is solid at 12.5%, but slightly down from previous periods, suggesting a need to enhance operational efficiency. Overall, the income statement shows a healthy top-line growth but slight pressure on profitability margins.
Balance Sheet
65
Positive
Starbucks’ balance sheet reflects high leverage with a negative stockholders' equity of $7.6 billion in TTM, indicating a debt-heavy capital structure. The debt-to-equity ratio is not calculable due to negative equity, emphasizing the financial risk. Despite this, the company maintains a stable asset base of $31.6 billion, demonstrating resilience. The equity ratio is negative, highlighting potential vulnerability. While Starbucks manages its assets well, the high leverage poses a significant risk to financial stability.
Cash Flow
80
Positive
Starbucks shows strong cash flow generation with operating cash flow of $5.28 billion in TTM and a healthy free cash flow of $3.06 billion. The free cash flow to net income ratio is high, indicating efficient cash conversion. However, a decline in operating cash flow compared to the previous year suggests the need for improved cash management. Despite minor fluctuations, the company's cash flow remains strong, supporting its operational needs and capital expenditure.
BreakdownTTMSep 2024Dec 2023Dec 2022Dec 2021Sep 2020
Income Statement
Total Revenue36.35B36.18B35.98B32.25B29.06B23.52B
Gross Profit9.07B9.71B9.85B8.37B8.39B5.06B
EBITDA6.33B7.12B7.40B6.24B7.35B3.10B
Net Income3.13B3.76B4.12B3.28B4.20B928.30M
Balance Sheet
Total Assets31.63B31.34B29.45B27.98B31.39B29.37B
Cash, Cash Equivalents and Short-Term Investments3.01B3.54B3.95B3.18B6.62B4.63B
Total Debt26.01B25.80B24.60B23.80B23.61B25.26B
Total Liabilities39.25B38.78B37.43B36.68B36.71B37.17B
Stockholders Equity-7.62B-7.45B-7.99B-8.71B-5.32B-7.81B
Cash Flow
Free Cash Flow2.77B3.32B3.68B2.56B4.52B114.20M
Operating Cash Flow5.57B6.10B6.01B4.40B5.99B1.60B
Investing Cash Flow-2.93B-2.70B-2.27B-2.15B-319.50M-1.71B
Financing Cash Flow-2.72B-3.72B-2.99B-5.64B-3.65B1.71B

Starbucks Technical Analysis

Technical Analysis Sentiment
Positive
Last Price94.44
Price Trends
50DMA
87.33
Positive
100DMA
93.14
Positive
200DMA
94.58
Negative
Market Momentum
MACD
1.67
Negative
RSI
61.63
Neutral
STOCH
75.74
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SBUX, the sentiment is Positive. The current price of 94.44 is above the 20-day moving average (MA) of 92.31, above the 50-day MA of 87.33, and below the 200-day MA of 94.58, indicating a neutral trend. The MACD of 1.67 indicates Negative momentum. The RSI at 61.63 is Neutral, neither overbought nor oversold. The STOCH value of 75.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SBUX.

Starbucks Risk Analysis

Starbucks disclosed 30 risk factors in its most recent earnings report. Starbucks reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Starbucks Peers Comparison

Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
77
Outperform
$17.08B19.1715.73%2.10%2.79%19.36%
76
Outperform
$12.57B29.2133.55%1.44%15.09%31.24%
75
Outperform
$11.06B174.518.57%30.42%108.41%
73
Outperform
$107.32B34.33-47.07%2.58%-0.50%-24.28%
MCMCD
71
Outperform
$210.28B25.94-216.57%2.41%-0.22%-3.83%
YUYUM
68
Neutral
$41.69B29.91-19.43%1.89%10.09%-11.50%
66
Neutral
£1.86B11.276.18%3.11%0.61%-17.57%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SBUX
Starbucks
94.44
21.68
29.80%
MCD
McDonald's
294.08
51.92
21.44%
TXRH
Texas Roadhouse
189.46
20.34
12.03%
YUM
Yum! Brands
150.00
24.52
19.54%
YUMC
Yum China Holdings
45.76
15.87
53.09%
BROS
Dutch Bros Inc
67.22
24.41
57.02%

Starbucks Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
Starbucks Approves Performance-Based Stock Units for Executives
Positive
Jul 2, 2025

On June 29, 2025, Starbucks‘ Board of Directors approved performance-based restricted stock units for its executive officers as part of the ‘Back to Starbucks’ strategy. This initiative aims to motivate leaders to achieve transformation goals, including reducing operating expenses and enhancing in-store experiences, with potential shareholder value creation. The awards, valued at $6,000,000, are contingent on meeting specific targets by fiscal year 2027, with payouts linked to operational achievements and shareholder returns.

The most recent analyst rating on (SBUX) stock is a Hold with a $76.00 price target. To see the full list of analyst forecasts on Starbucks stock, see the SBUX Stock Forecast page.

Business Operations and StrategyRegulatory Filings and Compliance
Starbucks Updates Bylaws for Enhanced Transparency
Neutral
Jun 30, 2025

On June 25, 2025, Starbucks Corporation’s board of directors amended the company’s bylaws to align with the SEC’s universal proxy rules and updated procedures for shareholder director nominations and business proposals. These changes are expected to enhance transparency and modernize shareholder engagement, potentially impacting the company’s governance and stakeholder interactions.

The most recent analyst rating on (SBUX) stock is a Hold with a $76.00 price target. To see the full list of analyst forecasts on Starbucks stock, see the SBUX Stock Forecast page.

Executive/Board ChangesBusiness Operations and Strategy
Starbucks Expands Board with New Appointments
Positive
Jun 26, 2025

On June 25, 2025, Starbucks announced the expansion of its Board of Directors from nine to eleven members, appointing Marissa Mayer and Dambisa F. Moyo as new directors. This strategic move is expected to enhance Starbucks’ focus on technology, transformation, and global affairs, aligning with its ‘Back to Starbucks’ strategy to leverage digital tools and strengthen its market position.

The most recent analyst rating on (SBUX) stock is a Hold with a $76.00 price target. To see the full list of analyst forecasts on Starbucks stock, see the SBUX Stock Forecast page.

Private Placements and FinancingBusiness Operations and Strategy
Starbucks Enters New Five-Year Credit Agreement
Neutral
Jun 16, 2025

On June 13, 2025, Starbucks Corporation entered into a new Five-Year Credit Agreement with several financial institutions, including Bank of America and Wells Fargo, among others. This new agreement led to the termination of a previous credit agreement from September 16, 2021, reflecting Starbucks’ strategic financial adjustments to support its operations and growth.

The most recent analyst rating on (SBUX) stock is a Hold with a $76.00 price target. To see the full list of analyst forecasts on Starbucks stock, see the SBUX Stock Forecast page.

Executive/Board ChangesBusiness Operations and Strategy
Starbucks Appoints Mike Grams as COO
Neutral
Jun 4, 2025

On June 4, 2025, Starbucks Corporation announced the appointment of Mike Grams as the new Chief Operating Officer, reinstating the position within its executive leadership team. This strategic move aims to enhance leadership accountability and operational efficiency by consolidating global coffeehouse development and supply chain under Grams’ oversight. Additionally, the company is undergoing organizational changes to strengthen its focus on sustainability and brand integration, with key leadership roles being restructured to accelerate progress towards its business goals. The departure of Brad Lerman, the Chief Legal Officer, was also announced, with a search for his successor underway.

The most recent analyst rating on (SBUX) stock is a Sell with a $76.00 price target. To see the full list of analyst forecasts on Starbucks stock, see the SBUX Stock Forecast page.

Private Placements and Financing
Starbucks Completes $1.75 Billion Senior Notes Offering
Neutral
May 8, 2025

On May 8, 2025, Starbucks completed a public offering of senior notes totaling $1.75 billion, consisting of $750 million due in 2028, $500 million due in 2030, and $500 million due in 2035. This move is likely to impact the company’s financial strategy by providing additional capital, while the notes will rank equally with other senior unsecured debts and are subject to standard covenants and events of default.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 03, 2025