Starbucks Upgraded to Hold with $92 Price Target After China JV Closes
Jefferies raised Starbucks to Hold from Underperform and lifted its price target to $92 from $86 after closing a China JV on April 2. They forecast fiscal 2026 EPS of $2.27 and fiscal 2027 EPS of $2.73, below consensus, and note Starbucks trades at 35 times forward earnings versus peers.
1. Jefferies Upgrade and Price Target Increase
Jefferies moved Starbucks from Underperform to Hold and boosted its price target to $92 from $86, reflecting improved visibility into the turnaround under CEO Brian Niccol.
2. China Joint Venture Reduces International Exposure
The April 2 joint venture agreement in China reduces Starbucks’ international footprint, cutting exposure that previously accounted for approximately 33% of system sales, 27% of revenues and 25% of operating profit.
3. EPS Forecasts and Conservative Assumptions
Jefferies forecasts earnings per share of $2.27 for fiscal 2026 and $2.73 for fiscal 2027, both below market consensus, based on conservative same-store sales growth and operating margin assumptions.
4. Premium Valuation and Growth Requirements
Starbucks trades at roughly 35 times forward earnings compared with 21 times for global franchised peers, and mid-single-digit same-store sales growth in the second half of fiscal 2026 would likely be needed to drive the stock higher.