Starbucks Corporation (SBUX) Stock Price Targets & Analysis
Comprehensive analysis of short, mid, and long-term price targets for Starbucks Corporation (SBUX).
Give me a comprehensive price target analysis for Starbucks Corporation (SBUX).
Executive Summary
Starbucks (SBUX) exhibits a resilient positioning within the consumer discretionary sector, with a current price of approximately $91.74 and a robust market cap exceeding $104 billion. The stock's valuation metrics suggest it is trading at a premium but supported by steady earnings growth and a strong dividend yield of 2.65%. Technical indicators point towards a consolidating trend with potential for upward movement, especially given the positive earnings momentum and analyst sentiment. The price targets set at $73 (low), $100 (median), and $115 (high) provide clear levels for strategic trading and investment.
Fundamental Analysis
Starbucks maintains solid financial health with a substantial cash reserve of $4.5 billion, despite a high debt level ($27.9 billion). The company's margins reflect efficiency, with a gross margin of approximately 23.7%, operating margin close to 9.5%, and profit margins at about 7.2%. The P/E ratio remains high at nearly 40, indicating market expectations for continued growth.
| Metric | Value |
|---|---|
| Market Cap | ~$104.3B |
| Trailing P/E | 39.71 |
| Forward P/E | 24.66 |
| Price-to-Book | -13.52 |
| Dividend Yield | 2.65% |
| Return on Assets | 7.6% |
Earnings Analysis
Despite some recent volatility, Starbucks' earnings trends remain robust, with diluted EPS increasing from approximately $0.49 to $0.93 over recent periods, indicating sustained growth. The EPS revisions show predominantly upward sentiment with more analyst upgrades than downgrades (+2 vs. -22 over recent weeks/months), suggesting confidence in future earnings.
The company reports healthy revenues (~$9.46 billion last quarter) with margins stabilizing, underpinning earnings quality. The EBITDA and operating income trends support a positive outlook, although high expenses and debt levels pose attention points.
Technical Analysis
Starbucks' current price fluctuates around its 50-day moving average (~$91.3), indicative of a neutral but consolidating trend. RSI remains below overbought levels (~36.7), signaling potential room for upward movement. MACD remains near zero, with recent crossover suggestive of near-term bullish momentum.
Analyst Consensus & Price Targets
Analysts project a median price of $100, with a high estimate of $115 and a low of $73. Out of 29 analysts, the majority maintain a bullish bias, considering recent earnings and sector dynamics. Catalysts include new store openings, product innovation, and global expansion.
Price Target Analysis (Short, Mid, Long-Term)
- Short-Term (3 months): The current price (~$91.74) is close to the median target ($100). Given technical momentum, a move towards $100-$105 is plausible driven by earnings catalysts and sector sentiment.
- Mid-Term (12 months): Target of $100 is justified by earnings growth, dividend stability, and valuation multiples remaining supported amid sector recovery. Risk factors include economic slowdown or margin pressures.
- Long-Term (3+ years): A $115 target is achievable through global expansion, innovation, and premium branding, with steady earnings enhancements. Sustained growth hinges on operational execution and market conditions.
| Time Frame | Price Target | Justification |
|---|---|---|
| Short-Term | ~$100 | Technical support and earnings momentum |
| Mid-Term | ~$100 | Consistent growth and sector outlook |
| Long-Term | ~$115 | Expansion opportunities and brand strength |
Key Risks & Opportunities
- Risks: Supply chain disruptions, input costs, aggressive competition, macroeconomic downturns, and high valuation risks.
- Opportunities: Market share gains, product diversification, digital engagement, and expansion in emerging markets.
Investment Recommendation
Rating: Buy
Time Horizon: 12-24 months
Expected Return: 9-25%, considering the path from current levels towards the median and high targets, supported by earnings growth and technical breakout potential.
The stock's technical resistance at ~$100 aligns with the median analyst target, offering a strategic entry point, with bullish catalysts expected to sustain upward momentum over the medium to long term.