Starbucks Stock Falls 19% in 6 Months: Is It Time to Buy?

Starbucks Corporation's shares have fallen 18.6% over six months, underperforming the industry and the S&P 500. The company faces challenges in its core U.S. market, including declining comparable sales and transaction volumes, and a contracted operating margin. Analysts have revised down their EPS estimates for 2025 and 2026, indicating negative sentiment. The stock is trading above the industry average, but with a high forward P/E ratio of 33.99X.

Starbucks Corporation (SBUX) has been grappling with declining comparable sales in its core U.S. market, where sales slipped 2% in the third quarter of fiscal 2025 [1]. The company is implementing a "Back to Starbucks" strategy, focusing on innovation to reenergize customers. Key launches include protein cold foam, coconut water-based beverages, gluten-free, and high-protein foods, and artisanal baked goods [1].

CEO Brian Niccol emphasized the importance of beverage innovation to restore positive transaction growth in the United States [1]. However, the company faces intense competition from rivals like McDonald's and Dutch Bros Coffee, which are expanding their beverage offerings and appealing to younger consumers [1].

Starbucks' stock has underperformed the industry and the S&P 500, falling 18.4% over the past six months [1]. The company's forward P/E ratio stands at 33.99X, above the industry average of 2.7 [1]. Analysts have revised down their EPS estimates for 2025 and 2026, indicating negative sentiment [1]. Despite these challenges, several institutional investors, including Raymond James Financial Inc., have increased their stakes in Starbucks [2].

References:
[1] https://www.barchart.com/story/news/34251542/will-new-beverage-innovation-revive-starbucks-u-s-comparable-sales
[2] https://www.marketbeat.com/instant-alerts/filing-raymond-james-financial-inc-acquires-359024-shares-of-starbucks-corporation-nasdaqsbux-2025-08-17/