Starbucks stock downgraded as turnaround will need more time, says analyst

Published On Sep 24, 2024, 8:52 AM

Starbucks has been downgraded by Jefferies analyst Andy Barish from 'buy' to 'underperform,' with a new price target of $76. Barish cites uncertainty about the company's short-term future and a likely decline in sales growth as key reasons for the downgrade. Despite a recent surge in stock price, which increased nearly 30% since August, potential underperformance is expected as the company's new CEO Brian Niccol implements changes amidst existing operational challenges. Analysts foresee disappointing earnings for the fourth quarter and FY2025, with expectations of low single-digit EPS growth and a decline in same-store sales.

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Stock Forecasts

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Negative

Given the recent downgrade and predicted operational challenges, Starbucks is likely to face downward price pressures in the near future. The market's response to the new CEO's strategies and disappointing sales related to seasonal offerings could further hinder stock performance in the short term.

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