Jefferies Upgrades Starbucks To Hold With $92 Target; McDonald’s Launches Crafted Sodas
Jefferies upgraded Starbucks to Hold from Underperform with a $92 price target (up from $86), citing stabilizing U.S. operations and reduced China franchise exposure. McDonald’s will roll out energy drinks and crafted sodas priced below specialty chains next month and in August, posing competition to Starbucks’ high-margin beverage business.
1. Jefferies Upgrade Details
In April Jefferies raised its rating on Starbucks to Hold from Underperform, boosting the 12-month price target to $92 from $86. The firm cited stabilizing U.S. operations under CEO Brian Niccol and a clearer path following the reduction of China franchise exposure, though it noted valuation still appears premium.
2. McDonald’s Beverage Push and Competitive Impact
McDonald’s will introduce new cold beverages next month, including Dragonberry energy drinks and flavored crafted sodas priced below specialty chains, with energy drinks following in August. This value-driven initiative aims to draw price-sensitive customers and could encroach on Starbucks’s high-margin beverage segment while presenting operational challenges around service speed.