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Starbucks (SBUX)
NASDAQ:SBUX
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Starbucks
(NASDAQ:SBUX)
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Rating:59Neutral
Price Target:
$99.00
▲(7.67% Upside)
The score is held back primarily by weakened profitability versus prior years and elevated financial risk from high leverage/negative equity. This is partly offset by improving operating momentum and constructive FY26 guidance, along with strong technical trend signals. Valuation remains a notable headwind due to the very high P/E despite a moderate dividend yield.
Positive Factors
Revenue Growth Momentum
Sustained top-line growth and improving comparable-store sales indicate durable consumer demand and successful execution of the 'Back to Starbucks' strategy. Consistent revenue expansion supports store economics, investment payback, and provides runway for incremental margin recovery over several quarters.
Strategic China JV and International Scale
Partnering with Boyu to localize China retail ops is a structural move to accelerate scale using local expertise and capital. It de-risks operating complexity, enables faster market penetration, and can drive long-term revenue and margin upside even if some near-term deconsolidation compresses reported top-line.
Loyalty & Digital Engagement Strength
A large, growing Rewards base creates repeat purchase behavior, higher spend per customer, and valuable first-party data for personalization. This durable advantage supports customer lifetime value, improves marketing ROI, and underpins longer-term revenue resilience across channels and product formats.
Negative Factors
High Leverage and Negative Equity
Material leverage and negative equity materially constrain financial flexibility: higher refinancing and interest risk, limited capacity for buybacks or acquisitions, and greater vulnerability if margins stall. For a consumer cyclical business, this raises structural solvency and capital-allocation risks.
Sustained Margin Compression
Multi-quarter margin erosion reflects elevated product/distribution costs and the annualization of earlier investments. Even with cost programs, slower margin recovery reduces earnings power and cash flow conversion, making profit restoration dependent on stickier cost savings and easing commodity/tariff pressures.
Weaker and Volatile Free Cash Flow Conversion
Positive but falling and volatile free cash flow limits the company's ability to de-lever, fund store growth, or sustain discretionary returns. Lower cash conversion versus earnings reduces the margin for error during cyclical downturns and increases reliance on consistent operational improvement to meet obligations.
Starbucks (SBUX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$104.76B
Dividend Yield2.88%
Average Volume (3M)9.29M
Price to Earnings (P/E)76.6
Beta (1Y)1.15
Revenue Growth2.80%
EPS Growth-50.71%
CountryUS
Employees361,000
SectorConsumer Cyclical
Sector Strength84
IndustryRestaurants
Share Statistics
EPS (TTM)0.56
Shares Outstanding1,139,300,000
10 Day Avg. Volume14,038,741
30 Day Avg. Volume9,293,355
Financial Highlights & Ratios
PEG Ratio-1.04
Price to Book (P/B)-12.06
Price to Sales (P/S)2.63
P/FCF Ratio39.97
Enterprise Value/Market Cap1.29
Enterprise Value/Revenue3.58
Enterprise Value/Gross Profit17.37
Enterprise Value/Ebitda25.71
Forecast
1Y Price Target
$100.59Price Target Upside9.40% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering25
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
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 the sale of food and beverages across its retail stores, with a significant portion coming from its specialty coffee drinks. The company also earns money through merchandise sales, including coffee beans, equipment, and packaged food items. Additionally, Starbucks has a robust loyalty program, Starbucks Rewards, which encourages repeat business and increases customer engagement. The company benefits from strategic partnerships, such as those with Nestlé for global coffee products distribution, and with various food suppliers to enhance its menu offerings. Moreover, Starbucks leverages its digital platforms, including mobile ordering and payments, to streamline operations and improve customer convenience, contributing to higher sales volumes. The company also explores international markets, expanding its footprint and revenue potential outside the United States.
Starbucks Key Performance Indicators (KPIs)
Any
Revenue by Segment
Breaks down earnings from different business areas like beverages, food, and merchandise, highlighting which segments are driving growth and profitability.
Breaks down earnings from different business areas like beverages, food, and merchandise, highlighting which segments are driving growth and profitability.
Data provided by:
The Fly
The FlyStarbucks Earnings Call Summary
Earnings Call Date:Jan 28, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:May 05, 2026
Earnings Call Sentiment Positive
The call conveyed clear top-line momentum and operational improvements—global revenue +5%, comps +4%, strong international performance (+10% revenue; China comps +7%), record Rewards engagement, and several scalable service and technology initiatives—indicating the turnaround is taking hold. However, meaningful near-term margin pressure and earnings headwinds were highlighted: consolidated operating margin down 180 bps (North America down ~420 bps), Q1 EPS down 19%, product/tariff inflation, and transitional accounting impacts from the China JV introduce P&L variability. Management expects margins and earnings to improve in the back half of FY26 (guidance: global comps ≥3%, net new stores ~600–650, EPS guide $2.15–$2.40) as investments anniversary, inflation abates, and cost actions take hold. Overall the positives around sustainable revenue and transaction recovery, international strength, and strategic initiatives outweighed the near-term margin and EPS challenges, with the company positioning for improvement later in the year.Q1-2026 Updates
Positive Updates
Revenue Growth and Comparable Sales Acceleration
Global revenue grew 5% year-over-year to $9.9 billion in Q1 FY26, with global comparable store sales accelerating to 4% growth.
North America and U.S. Transaction Momentum
North America revenue grew 3% to $7.3 billion; U.S. company-operated comp sales were up 4% with transactions up 3% and average ticket +1%. This was the first quarter in eight where U.S. company-operated transaction comps grew year-over-year.
Record Starbucks Rewards Engagement
Ninety-day active Starbucks Rewards members reached a record 35.5 million (up 3% year-over-year); Rewards transactions grew year-over-year for the first time in eight quarters and both rewards and non-rewards transactions grew (first time since 2022).
International Strength, led by China
International revenue grew 10% to $2.1 billion; comps grew in nine of the 10 largest international markets. China comps accelerated to +7% (third consecutive quarter of comp growth), with transactions improving about 5%.
Channel Development and Ready-to-Drink Momentum
Channel Development net revenues increased 19% year-over-year, led by higher revenue from the Global Coffee Alliance and ready-to-drink (RTD) business; launch of multi-serve refreshers concentrate drove strong demand.
Net New Stores and Global Development
Company reported 128 net new coffee houses globally in Q1 (North America +49 net new to 18,360; international opened 79 net new coffee houses). India surpassed 500 coffee houses and Mexico is on track to surpass 1,000 this year.
Operational Improvements and Service Initiatives
Green Apron service standard and operational changes drove better customer experience: 650 pilot stores are outperforming the fleet by ~200 basis points in comp; peak cafe and drive-through service times were below the four-minute targets; ~200 café uplifts completed and >1,000 planned by end of 2026.
Cost and Organizational Actions
Consolidated G&A decreased 7% in Q1 as earlier streamlining actions begin to materialize; company identified a ~$2 billion cost-reduction program to be executed over the next couple of years.
Negative Updates
Operating Margin Contraction
Consolidated operating margin contracted 180 basis points year-over-year to 10.1% in Q1; North America operating margin declined ~420 basis points, largely due to the annualization of Back to Starbucks investments and product/distribution cost inflation (tariffs and elevated coffee pricing).
Earnings Per Share Decline
Q1 EPS was $0.56, down 19% year-over-year, reflecting ongoing investments and margin pressure.
Product and Distribution Inflation Headwinds
Approximately one-third of North America margin contraction attributed to product and distribution cost inflation (tariffs and elevated coffee prices). Management expects these pressures to peak in Q2 and ease in the back half of the fiscal year.
Licensed Portfolio and Channel Weakness
U.S. licensed store portfolio revenue declined in Q1, primarily due to ongoing trends in grocery and retail channels, partially offset by growth in other licensed channels (business, college, healthcare).
China Transaction and Accounting Transition
Agreement to form JV with Boyu Capital for China retail ops (Boyu up to 60%, Starbucks retains 40%) led to classification of China assets as held for sale; company recorded $39 million less in monthly expenses starting December due to ceased depreciation/amortization, creating near-term P&L variability. Deconsolidation upon close could slightly lower consolidated revenues and comps and introduces timing/earnings variability.
Higher Effective Tax Rate
Q1 effective tax rate increased to 26.8% year-over-year, primarily driven by lapping discrete tax items from the prior year.
Company Guidance
Starbucks guided fiscal 2026 to at least 3% global comparable store sales growth (3%+ in the U.S.), consolidated net revenues to grow roughly in line with comp growth, and slightly higher consolidated operating margins year‑over‑year with improvement weighted to the back half of the year (Q2 typically the lowest‑margin quarter); they expect consolidated G&A dollars to run below FY2023 and see coffee and tariff pressures peaking in Q2 and easing in H2. The company plans about 600–650 net new coffeehouses (150–175 U.S. company‑operated, a slight decrease in North America licensed, and 450–500 international with China comprising close to half), and provided EPS guidance of $2.15–$2.40 (noting a China joint venture would likely modestly lower consolidated revenues/comps but could be ~40 basis points accretive to consolidated margins on an annualized basis and the transaction is expected to be ~$0.02–$0.03 dilutive to EPS); they also expect the China JV (Boyu up to 60% / Starbucks retaining 40%) to close in the spring and noted assets held for sale reduced monthly expenses by about $39 million.Starbucks Financial Statement Overview
Summary
Revenue remains resilient and free cash flow is positive, but profitability has compressed sharply versus 2023–2024 levels. The biggest risk is the balance sheet: very high debt and persistently negative equity reduce financial flexibility and raise risk if margins stay pressured.Income Statement
TTM (Trailing-Twelve-Months) revenue is up strongly versus the prior annual period, but profitability has compressed sharply: net margin is ~5% in TTM versus ~10–11% in 2023–2024, with similar step-downs in operating and EBITDA margins. While the business remains solidly profitable at the operating level, the multi-year trend shows weakening earnings power since 2021, which is a key watch item.58
Neutral
Balance Sheet
Leverage is the primary concern. Total debt remains very high (roughly $25–27B) and stockholders’ equity is negative across all periods shown, which materially reduces balance-sheet flexibility and makes equity-based leverage measures unfavorable. Total assets are stable, but the combination of sizeable debt and negative equity elevates financial risk even for a mature, cash-generative restaurant brand.28
Negative
Cash Flow
Cash generation is positive, with TTM operating cash flow (~$4.3B) and free cash flow (~$2.3B) comfortably above zero; however, free cash flow is down year-over-year and has been volatile over the last several years. Cash conversion also looks weaker lately, with TTM free cash flow running at roughly half of net income, signaling less cushion than in prior years.55
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 37.18B | 36.18B | 35.98B | 32.25B | 29.06B |
| Gross Profit | 8.98B | 9.71B | 9.85B | 8.37B | 8.39B |
| EBITDA | 5.38B | 7.12B | 7.40B | 6.24B | 7.35B |
| Net Income | 1.86B | 3.76B | 4.12B | 3.28B | 4.20B |
Balance Sheet | |||||
| Total Assets | 32.02B | 31.34B | 29.45B | 27.98B | 31.39B |
| Cash, Cash Equivalents and Short-Term Investments | 3.47B | 3.54B | 3.95B | 3.18B | 6.62B |
| Total Debt | 26.61B | 25.80B | 24.60B | 23.80B | 23.61B |
| Total Liabilities | 40.11B | 38.78B | 37.43B | 36.68B | 36.71B |
| Stockholders Equity | -8.10B | -7.45B | -7.99B | -8.71B | -5.32B |
Cash Flow | |||||
| Free Cash Flow | 2.44B | 3.32B | 3.68B | 2.56B | 4.52B |
| Operating Cash Flow | 4.75B | 6.10B | 6.01B | 4.40B | 5.99B |
| Investing Cash Flow | -2.49B | -2.70B | -2.27B | -2.15B | -319.50M |
| Financing Cash Flow | -2.30B | -3.72B | -2.99B | -5.64B | -3.65B |
Starbucks Technical Analysis
Positive
91.95
Price Trends
87.83
Positive
85.50
Positive
86.57
Positive
Market Momentum
2.22
Positive
52.08
Neutral
20.54
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 91.95 is above the 20-day moving average (MA) of 91.91, above the 50-day MA of 87.83, and above the 200-day MA of 86.57, indicating a bullish trend. The MACD of 2.22 indicates Positive momentum. The RSI at 52.08 is Neutral, neither overbought nor oversold. The STOCH value of 20.54 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 29 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $22.95B | 20.89 | 54.10% | 3.06% | 8.61% | 9.39% | |
75 Outperform | $31.71B | 23.88 | 28.08% | 3.60% | 16.82% | -29.91% | |
73 Outperform | $51.40B | 34.26 | 44.96% | ― | 7.31% | 5.26% | |
65 Neutral | $224.33B | 26.87 | ― | 2.31% | 1.26% | 2.87% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
59 Neutral | $104.76B | 76.60 | ― | 2.88% | 2.80% | -50.71% | |
59 Neutral | $43.18B | 30.28 | ― | 1.84% | 11.60% | -4.33% |
* Consumer Cyclical Sector Average
SBUX
Starbucks
91.95
-13.41
-12.73%
CMG
Chipotle
38.87
-19.49
-33.40%
DRI
Darden Restaurants
199.35
6.48
3.36%
MCD
McDonald's
315.00
31.56
11.13%
YUM
Yum! Brands
155.50
26.50
20.54%
QSR
Restaurant Brands International
66.99
7.54
12.68%
Starbucks Corporate Events
Business Operations and StrategyM&A Transactions
Starbucks Forms Joint Venture with Boyu Capital in China
Positive
Nov 3, 2025
On November 3, 2025, Starbucks announced a joint venture with Boyu Capital, where Boyu will acquire up to a 60% interest in Starbucks’ retail operations in China. This strategic partnership aims to accelerate Starbucks’ growth in China, leveraging Boyu’s local expertise to expand into new cities and regions, while Starbucks retains a 40% interest and continues to own and license its brand. The venture is expected to enhance Starbucks’ market presence and customer experience in China, with plans to increase the number of stores from 8,000 to 20,000, reflecting a significant milestone in Starbucks’ 26-year journey in the region.
The most recent analyst rating on (SBUX) stock is a Buy with a $105.00 price target. To see the full list of analyst forecasts on Starbucks stock, see the SBUX Stock Forecast page.
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.