Starbucks (SBUX) Plunges 5.17% on Tariff, China Sales Concerns

On April 4, 2025, Starbucks' stock price dropped by 5.17% in pre-market trading, reflecting a significant decline in investor sentiment.

Bernstein has lowered its target price for Starbucks from $115 to $105, citing concerns over the company's performance and market conditions. This adjustment comes as Starbucks faces increasing challenges in both domestic and international markets.

Starbucks' recent struggles are partly attributed to the rising tariffs on coffee imports, which could significantly impact the company's earnings. The Trump Administration's announcement of "reciprocal tariffs" on all U.S. imports has raised concerns about potential disruptions to Starbucks' supply chain and increased operational costs.

Additionally, Starbucks' performance in key markets, such as China, has been underwhelming. The company's same-store sales in China have declined, and its market share has been eroded by local competitors offering more affordable options. This trend is particularly concerning as China has been a significant growth driver for Starbucks in recent years.

Despite these challenges, some analysts remain optimistic about Starbucks' long-term prospects. The average one-year price target for Starbucks' stock stands at $106.52, with some analysts predicting a potential upside of over 20%. However, the current market volatility and tariff concerns pose significant risks to these optimistic forecasts.