William Blair analyst Sharon Zackfia has reiterated their neutral stance on SBUX stock, giving a Hold rating today.
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Sharon Zackfia has given her Hold rating due to a combination of factors impacting Starbucks’ financial outlook. The company has announced a restructuring plan that includes closing stores and rationalizing SG&A expenses, which will lead to a 1% decline in the Americas company-owned store count by fiscal 2025. This involves approximately 400 net closures in the fourth quarter, affecting around 2% of the U.S. and Canada store portfolio. The closures are part of a strategy to focus on locations that align with the brand’s strategy and financial performance goals, with growth expected to resume in fiscal 2026.
Additionally, Starbucks plans to eliminate 900 nonretail roles to help offset a $500 million investment in store labor over the next year. The restructuring is expected to cost around $1 billion, with significant expenses related to store impairments and severance. Zackfia has adjusted her expectations for the company’s financial performance, projecting a decline in adjusted EPS for the fiscal fourth quarter and muted growth in fiscal 2026. The risks associated with Starbucks’ high exposure to the U.S. and China, currency fluctuations, competitive pressures, and inflationary challenges contribute to the Hold rating, as the current stock valuation does not yet reflect a sufficient rebound in sales.
In another report released today, TD Cowen also maintained a Hold rating on the stock with a $95.00 price target.