Starbucks: BMO Capital Maintains Outperform, Raises PT to $115 from $100

Starbucks: BMO Capital Maintains Outperform, Raises PT to $115 from $100

Starbucks Corporation (SBUX) has received a positive update from BMO Capital, which raised its stock price target to $115 from $100, while maintaining an Outperform rating. This move reflects the investment firm's confidence in the company's turnaround progress, despite a recent earnings miss.

In the fiscal third quarter, Starbucks reported earnings per share (EPS) of $0.50, missing the Zacks Consensus Estimate by $0.15 [1]. The earnings miss was primarily attributed to one-time investments and discrete tax items, which collectively impacted EPS by 11 cents. The company's net revenues, however, beat the consensus mark, growing 3.8% year over year to $9.46 billion [1].

BMO Capital highlighted several positive developments in Starbucks' turnaround strategy. The company has made progress across its four pillars—partners, store experience, customer engagement, and menu innovation. Additionally, the firm noted improvements in U.S. comparable transactions for a third consecutive quarter and continued momentum into July [3].

The investment firm also pointed to the company's focus on long-term strength and future growth initiatives, such as launching innovations to support growth in fiscal 2026. Furthermore, BMO Capital indicated that fourth-quarter labor investments should enable more aggressive sales initiatives [3].

Despite the earnings miss, Starbucks' stock price surged 4.4% in yesterday's after-hours trading session, reflecting investor confidence in the company's long-term prospects [1].

References:
[1] https://www.tradingview.com/news/zacks:586a9bf90094b:0-starbucks-q3-earnings-miss-estimates-revenues-rise-y-y-stock-up/
[2] https://www.investing.com/news/analyst-ratings/bmo-capital-raises-veralto-stock-price-target-to-125-on-strong-execution-93CH-4160578
[3] https://www.investing.com/news/analyst-ratings/bmo-capital-raises-starbucks-stock-price-target-to-115-on-turnaround-progress-93CH-4160531