Starbucks is slated to release fiscal third-quarter results after the stock market’s closing bell Tuesday, and most analysts are adopting a sentiment somewhere between apprehension and cautious optimism as the coffee giant tries to right the ship. An LSEG survey shows analysts, on average, anticipate that the coffee chain will earn 65 cents per share, or a slump of 30% from a year ago. On the other hand, Starbucks’ expected revenue of $9.31 billion could mark year-over-year growth of 2.1%. Starbucks disappointed investors in its fiscal second quarter as adjusted earnings of 41 cents per share on revenue of $8.76 billion missed expectations. Also, a key metric, global same-store sales, fell 1%. At its U.S. cafes, same-store sales slipped 2%. Same-store sales, or comps, measure sales performance at locations open at least a year. Since the start of 2025, Starbucks shares have climbed 1.8%, compared with the S & P 500’s year-to-date gain of 8.4%. SBUX YTD mountain SBUX YTD chart Slumping sales have plagued Starbucks, but CEO Brian Niccol — who took the helm at the coffee chain last September — has promised investors his turnaround strategy will win back customers and lift employee morale. In last quarter’s earnings call, Niccol said earnings per share wasn’t a metric that could be used to measure the success of its efforts at this stage. “Our financial results don’t yet reflect our progress, but we have real momentum with our ‘Back to Starbucks’ plan,” Niccol said in a separate video posted on the company’s website. “We’re testing and learning at speed and we’re seeing changes in our coffeehouses.” Analysts are also closely tracking speculation that Starbucks is considering selling its China operations as a potential catalyst for the stock. The company is still deciding whether to sell a controlling or minority stake and if it will keep any parts such as its supply chain, Reuters reported, citing sources with knowledge of the situation. Heading into earnings, many on Wall Street remain apprehensive of the stock and are waiting for more proof. According to LSEG, 17 analysts covering Starbucks have rated it a strong buy or buy, while 18 analysts have assigned it a hold rating and four have rated it an underperform or sell. Here’s what analysts at some of Wall Street’s biggest banks are saying before Starbucks’ latest earnings report. Jefferies: Underperform rating and $76 price target Jefferies downgraded shares of Starbucks from a hold rating to underperform earlier this month. The firm’s price target implies the risk of 19% downside ahead, based on Starbucks’ Monday closing price of $93.67 per share. “Downgrading to Underperform w/ a $76 PT and below-Street estimates near-term as we think the stock has surpassed reasonable expectations for improving fundamentals, in our view. Credit/debit card data, as well as foot traffic and app data, suggest downside to the Cons F3Q and F4Q US comp ests, as complex people and ops issues could take a longer time than expected for mgmt make progress on, as well as significant investments weighing on earnings.” Morgan Stanley: Overweight rating and $95 price target Analyst Brian Harbour’s target would equate to an upside of 1% for the stock. “Given how well the stock has done since last earnings, we wouldn’t say the setup is particularly compelling, or that anything is underappreciated, for a quarter where U.S. sales are probably in line, maybe slightly better, but we’d assume EPS still tough. We are short of St and mark down forward estimates here, mainly trying to build in further labor investment.” Bernstein: Outperform rating and $100 price target The firm’s projection of where the stock should trade is almost 7% above its current price. “We believe that Starbucks’ China business is likely worth $5-7B if Starbucks continues to directly manage the business. … However, media reports have suggested bids above a $10B valuation, which we expect to be driven either by a local partner that focuses on higher margins, or by one with greater appetite for unit growth (even at lower margin). … We believe that the $10B proceeds could be a further unlock to the stock, as they could be reinvested in the business to accelerate the turnaround. … We believe that the sale of a majority stake in the China business is a potential catalyst for stock re-acceleration.” Stifel: Buy rating and $105 price target Analyst Chris O’Cull upped his price target to $105 from $92 earlier this month. This new forecast is 12% above Starbucks’ Monday closing price. “With several reports indicating the company is in active talks with potential buyers of a stake in China, we suspect management will provide an update on the company’s progress in identifying potential partners and its assessment of the core strategic challenges in the market. … Overall, we remain focused on the U.S. turnaround progress, viewing it as the primary catalyst for share appreciation over the next 12 months. However, securing a strategic partner with a strong track record in China could be well received by investors, as it should enhance Starbucks’ ability to gain share in a growing market.” Deutsche Bank: Buy rating and $107 price target In a note from earlier this month, the bank lifted its price target to $107 from $105. This is roughly 14% above where shares of Starbucks closed on Monday. “We believe buy-side expectations for the labor investments are slightly higher than our estimates, but generally in the range, while expectations for benefits to top-line seem more subdued. We think SBUX is approaching an inflection point to return to positive SSS, and we believe the combination of the labor investments and relevant menu innovation (including protein) could be powerful initiatives to drive upside to SSS, which is the key catalyst for the stock.” — CNBC’s Michael Bloom contributed to this report.
