TD Cowen Sets $120 Target, Predicts 15.1% Operating Margin for Starbucks in 2028
SBUX•TD Cowen upgraded Starbucks to Buy, raised its price target to $120, forecasting fiscal 2028 EPS of $3.94 and operating margin of 15.1% driven by easing commodity costs and $2 billion in cost savings. Shares climbed 1.4% premarket to a 52-week high of $108.88, extending a 28% year-to-date rally.
1. Analyst Upgrade and Price Target
TD Cowen upgraded Starbucks to Buy and raised its price target to $120, reflecting confidence in a sustained turnaround and premium valuation at approximately 30 times fiscal 2028 EPS.
2. Earnings and Margin Projections
The firm raised its fiscal 2026-2028 EPS estimates by around 9%, projecting earnings of $2.46, $3.23 and $3.94 respectively, and foresees a consolidated operating margin of 15.1% by 2028.
3. Margin Recovery Drivers
Margin expansion is expected from easing coffee commodity costs, $2 billion in gross cost savings, sales leverage and an $800 million cumulative savings target by the end of 2027.
4. Stock Reaction
Shares climbed 1.4% premarket to a 52-week high of $108.88, extending a 28% rally year-to-date as investors respond to the bullish projections.
