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Yahoo
11-07-2025
- Business
- Yahoo
Starbucks China stake sale may fund turnaround, says Bernstein
-- A potential $10 billion sale of Starbucks' China business could provide the company with financial firepower to accelerate its turnaround strategy, Bernstein analysts said. The broker views the transaction as a possible catalyst for stock re-acceleration, as refranchising would help Starbucks (NASDAQ:SBUX) become more asset-light and reduce exposure to China's volatile geopolitical and competitive landscape. '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,' a team led by Danilo Gargiulo said in a Thursday note. They also see a possibility that some of the proceeds could be returned to shareholders. Starbucks has struggled in China amid rising competition from local brands like Luckin and Cotti, with market share falling from 42% in 2019 to 14% in 2024 and Average Unit Volumes (AUV) down 43%. Under these conditions, Bernstein estimates the China business is worth $5–7 billion if kept under direct ownership. The analysts expect more moderate unit growth of 7–8%, down from the historical 10–15%, as the company focuses on being selective with locations to preserve cash-on-cash returns. Same-store sales are forecast at 2%, while operating margins, which peaked at 15%, are 'unlikely to change in the near future," the analysts added. A $10 billion valuation would imply either aggressive store growth or significantly improved margins, both of which Bernstein sees as challenging. Still, a local partner with a different growth appetite may pursue faster expansion to justify such a price. 'Alternatively, a more likely path for the local partner would be to increase the speed of store openings to a compound annual growth rate (CAGR) of 15% to reach a valuation of $10B,' the analysts wrote. They believe Starbucks would likely retain a stake in the China operations to benefit from future growth. Meanwhile, proceeds from a sale could be used to bolster investments in the U.S. turnaround, including the Green Apron initiative, or be directed toward shareholder returns. Bernstein thinks this strategic shift could support a valuation of over 30x earnings in a normalized post-2028 environment. The broker maintains an Outperform rating on the stock with a $100 price target. It sees potential for a $135 share price within three years, implying 42% upside from current levels. Related articles Starbucks China stake sale may fund turnaround, says Bernstein Roblox stock may rally further as Citi sees more runway growth Piper highlights Meta as best large-cap pick, lifts forecasts on AI strength Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Insider
05-07-2025
- Business
- Business Insider
Here's Why Starbucks Stock (SBUX) Could Rally Going Forward
Starbucks (SBUX) may be setting up for a comeback thanks to a series of strategic changes. Recently, the company added two new board members—economist Dambisa Moyo and former Yahoo CEO Marissa Mayer—both of whom bring deep experience in global strategy and technology. This move supports Starbucks' plan to modernize its digital presence and improve customer experiences through its 'Back to Starbucks' initiative. With their help, Starbucks may be able to roll out more effective loyalty programs and personalized services, which could bring more customers in and keep them coming back. Don't Miss TipRanks' Half-Year Sale Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week. At the same time, Starbucks is working hard to improve its stores and service. Indeed, the company is remodeling about 1,000 U.S. locations, bringing back comfortable seating, better lighting, and more self-serve options. It's also introducing a faster staffing model called 'Green Apron,' which has the goal of getting orders out in under four minutes across all 11,000 company-owned North American stores. These updates are designed to make Starbucks feel more like a welcoming place to relax, which could help boost customer traffic and increase the average spend per visit. And it seems like these efforts are starting to pay off as Starbucks is showing signs of a turnaround. After struggling earlier in the year due to tariff concerns, the stock has bounced back more than 11% since April. As a result, analysts from firms such as Bernstein and Barclays have raised their price targets, which indicates that they have confidence in Starbucks' leadership and strategy. In addition, cost-saving efforts, simpler menus, and AI tools like the 'Green Dot Assist' are expected to improve margins over time. If Starbucks can also grow in markets like China, these combined efforts could help drive the stock even higher in the months ahead. What Is the Price Target for SBUX Stock? When it comes to Wall Street, analysts have a Moderate Buy consensus rating on SBUX stock based on 13 Buys, 11 Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average SBUX price target of $95.52 per share implies that shares are almost fairly valued. However, if Starbucks continues to execute, the price could rise to the highest price target of $108 per share.
Yahoo
16-06-2025
- Business
- Yahoo
Starbucks (SBUX) Expands Labor Model Across North America; CEO Bets on In-Store Revival
Starbucks (SBUX, Financials) is fast-tracking its new staffing modelrolling it out across all 11,000 company-owned North American stores by the end of summer; a shift CEO Brian Niccol says is essential to reviving the brand's in-store experience. Warning! GuruFocus has detected 4 Warning Signs with NVDA. The Green Apron modelfirst tested in 700 storesadds order sequencing tools and dedicated drive-thru baristas; designed to cut wait times and boost throughput. We've learned; now we scale, Niccol said during the company's leadership summit in Las Vegas. The move accelerates Starbucks' Back to Starbucks strategy; a push to refocus on coffeehouse service after years of leaning on mobile and to-go orders. Niccol didn't provide financial figures for the rollout; but emphasized he would be ruthless about cutting spending unrelated to the turnaround. If it's not driving growth or experience; it's on the chopping block, he said. TD Cowen downgraded Starbucks to hold last month; citing uncertainty around execution and timing. The stock has gained just 11% over the last five yearswell behind the broader S&P 500. Niccol acknowledged the turnaround will take time; and said investors should look at in-store performance metricslike order wait timesrather than short-term EPS. Starbucks will host its next investor day in 2026. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
14-06-2025
- Business
- Yahoo
Starbucks service plan prompts surprising analyst stock-price-target revisions
Starbucks service plan prompts surprising analyst stock-price-target revisions originally appeared on TheStreet. Have a seat and let Brian Niccol tell you all about his big ideas for Starbucks () . Actually, seats are a part of the "Back to Starbucks" plan as the chief executive of the world's largest coffee chain looks to turn around a decline in foot traffic and sales. 💵💰Don't miss the move: Subscribe to TheStreet's free daily newsletter 💰 Niccol, who joined from Chipotle in September, said that pulling back on in-store seating was one of the company's biggest missteps, and he wants to fix that. "We had this strategy that I think was just a misfire of a purpose-driven store. It's like, well, the purpose is community connection," Niccol told Axios. "I think that's what got us off our game. We've got to get the seats back." Niccol made his comments during the company's Leadership Experience in Las Vegas, where Starbucks hosted more than 14,000 store managers. "It's time for us to lead again," Niccol told the crowd. "We're going to lead in warm, welcoming coffee houses. We're going to lead in innovation. Innovation to our menu." In the past several months Starbucks reintroduced condiment bars and ceramic mugs for in-house sipping, brought back handwritten notes on to-go cups and bags to foster better customer-barista connections, and returned free in-café refills to make its coffee shops feel more like homes. The Seattle coffee giant also refreshed and simplified its menu, discontinuing 13 items and eliminating extra charges for milk alternatives. In addition, the company plans to add full-time assistant managers across the U.S. to help busy stores run more smoothly. Former Starbucks CEO Howard Schultz reportedly was so thrilled with the strategy that he "did a cartwheel in my living room" the first time he heard about it. "It was so brilliant. It's short, to the point and it's exactly to the tip of the spear who we should be and who we are," Schultz said. "And we are, above all else, a coffee company."Niccol told Reuters that he would accelerate the rollout of the coffeehouse chain's new staffing and service model, aiming for all North American stores by summer's end. The initial plan called for just a third of U.S. stores by fiscal year-end. The Green Apron model includes in-store technology to more efficiently sequence orders, as well as dedicated baristas for drive-through orders. Starbucks initially rolled out the service changes to 700 stores. From a single store in Seattle in 1971, the company now has more than 40,000 outlets worldwide. During the company's April 29 quarterly earnings call, Niccol said it would be introduced in a third of U.S. stores by fiscal year-end. Starbucks used the Las Vegas event to unveil a generative AI assistant created with Microsoft () Azure's OpenAI, according to CNBC. It plans to roll out the system to 35 locations in June. A broad launch of what it calls the Green Dot Assist platform across the U.S. and Canada is slated for the company's fiscal 2026, which starts in the fall. Starbucks stock is up 3.1% in 2025 and up nearly 18% from a year ago. Citi analyst Jon Tower raised the investment firm's price target on Starbucks to $95 from $84 and affirmed a neutral rating on the shares, according to The Fly. The analyst also added an "upside 90-day short-term view" on Starbucks. The company's pull-forward of labor investment back into stores will likely lead traffic to recover more quickly, the analyst estimates. Tower said that while the cost of this investment remains unclear, the improvement in one-year traffic trends, particularly given soft comparisons, will likely drive the shares higher in the near he also said Starbucks's turnaround narrative remains "this will take time," as sales are emphasized before profit margins, and its long-term profitability remains unclear. RBC Capital boosted its price target on Starbucks to $100 from $95 while reiterating an outperform rating. The firm said it was encouraged following the presentations at the company's Leadership Experience. The accelerated labor deployment in particular suggests that management has increased confidence in their new strategy, translating to potential upside in revenue, RBC said. Ahead of the event, investors' expectations around fiscal 2026 earnings per share were depressed, since they considered that it would be another investment year, followed by more material traffic improvement in fiscal 2027, RBC service plan prompts surprising analyst stock-price-target revisions first appeared on TheStreet on Jun 14, 2025 This story was originally reported by TheStreet on Jun 14, 2025, where it first appeared. Sign in to access your portfolio
Miami Herald
14-06-2025
- Business
- Miami Herald
Starbucks service plan prompts surprising analyst stock-price-target revisions
Have a seat and let Brian Niccol tell you all about his big ideas for Starbucks (SBUX) . Actually, seats are a part of the "Back to Starbucks" plan as the chief executive of the world's largest coffee chain looks to turn around a decline in foot traffic and sales. Don't miss the move: Subscribe to TheStreet's free daily newsletter Niccol, who joined from Chipotle in September, said that pulling back on in-store seating was one of the company's biggest missteps, and he wants to fix that. "We had this strategy that I think was just a misfire of a purpose-driven store. It's like, well, the purpose is community connection," Niccol told Axios. "I think that's what got us off our game. We've got to get the seats back."Niccol made his comments during the company's Leadership Experience in Las Vegas, where Starbucks hosted more than 14,000 store managers. "It's time for us to lead again," Niccol told the crowd. "We're going to lead in warm, welcoming coffee houses. We're going to lead in innovation. Innovation to our menu." In the past several months Starbucks reintroduced condiment bars and ceramic mugs for in-house sipping, brought back handwritten notes on to-go cups and bags to foster better customer-barista connections, and returned free in-café refills to make its coffee shops feel more like homes. The Seattle coffee giant also refreshed and simplified its menu, discontinuing 13 items and eliminating extra charges for milk alternatives. In addition, the company plans to add full-time assistant managers across the U.S. to help busy stores run more smoothly. Former Starbucks CEO Howard Schultz reportedly was so thrilled with the strategy that he "did a cartwheel in my living room" the first time he heard about it. "It was so brilliant. It's short, to the point and it's exactly to the tip of the spear who we should be and who we are," Schultz said. "And we are, above all else, a coffee company." Related: Starbucks makes huge investment to solve a key problem Niccol told Reuters that he would accelerate the rollout of the coffeehouse chain's new staffing and service model, aiming for all North American stores by summer's end. The initial plan called for just a third of U.S. stores by fiscal year-end. The Green Apron model includes in-store technology to more efficiently sequence orders, as well as dedicated baristas for drive-through orders. Starbucks initially rolled out the service changes to 700 stores. From a single store in Seattle in 1971, the company now has more than 40,000 outlets worldwide. During the company's April 29 quarterly earnings call, Niccol said it would be introduced in a third of U.S. stores by fiscal year-end. Starbucks used the Las Vegas event to unveil a generative AI assistant created with Microsoft (MSFT) Azure's OpenAI, according to CNBC. It plans to roll out the system to 35 locations in June. A broad launch of what it calls the Green Dot Assist platform across the U.S. and Canada is slated for the company's fiscal 2026, which starts in the fall. Starbucks stock is up 3.1% in 2025 and up nearly 18% from a year ago. Citi analyst Jon Tower raised the investment firm's price target on Starbucks to $95 from $84 and affirmed a neutral rating on the shares, according to The Fly. The analyst also added an "upside 90-day short-term view" on Starbucks. The company's pull-forward of labor investment back into stores will likely lead traffic to recover more quickly, the analyst estimates. Tower said that while the cost of this investment remains unclear, the improvement in one-year traffic trends, particularly given soft comparisons, will likely drive the shares higher in the near term. Related: Starbucks reveals big change for baristas, customers But he also said Starbucks's turnaround narrative remains "this will take time," as sales are emphasized before profit margins, and its long-term profitability remains unclear. RBC Capital boosted its price target on Starbucks to $100 from $95 while reiterating an outperform rating. The firm said it was encouraged following the presentations at the company's Leadership Experience. The accelerated labor deployment in particular suggests that management has increased confidence in their new strategy, translating to potential upside in revenue, RBC said. Ahead of the event, investors' expectations around fiscal 2026 earnings per share were depressed, since they considered that it would be another investment year, followed by more material traffic improvement in fiscal 2027, RBC added. Related: Fund-management veteran skips emotion in investment strategy The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
