Coffee chain Starbucks (SBUX) is scheduled to announce its results for the fourth quarter of Fiscal 2025 after the market closes on Wednesday, October 29. SBUX stock has declined 4% year-to-date, as investors are concerned about the company’s unimpressive sales and margin pressures amid rising competition. Wall Street expects Starbucks to report earnings per share (EPS) of $0.56, reflecting a decline of 30% compared to the prior-year quarter. Meanwhile, revenue is expected to rise 3% to $9.33 billion.
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Investors will look forward to management’s commentary on the company’s “Back to Starbucks” turnaround plan.
Analysts’ Views Ahead of Starbucks’ Q4 Earnings
Heading into Q4 FY25 results, UBS analyst Dennis Geiger lowered his price target for Starbucks stock to $94 from $100 and reiterated a Hold rating. For Q4 FY25, Geiger expects limited progress on the company’s Back to Starbucks strategic initiative, with sales trends likely still challenged by a tough industry backdrop and continued pressure on margins and earnings. He noted that investor expectations indicate Q4 FY25 U.S. same-store sales growth of about flat to modestly down (consensus indicates a decline of 0.2%).
Geiger continues to expect Starbucks’ turnaround plan to drive a gradual sales recovery over time, backed by a strong leadership team and appropriate strategies across operations and other key areas. Over the near term, Geiger expects Starbucks to benefit from easier comparisons, recent closures of lower-performing stores, and ongoing initiatives to support a positive U.S. same-store sales inflection. That said, the analyst seeks better visibility into a positive inflection in underlying sales growth and greater clarity on margin and earnings power before getting more constructive on shares.
Meanwhile, Mizuho analyst Nick Setyan initiated coverage of SBUX stock with a price target of $84. While Setyan expects U.S. store closures to support Fiscal 2026 same-store sales growth (expects traffic from closed stores to shift to other SBUX stores), he contends that the problem of a less attractive relative value proposition remains a headwind, as SBUX is now 10% more expensive compared to coffee peers than it was in 2019.
Meanwhile, Setyan noted that international same-store sales growth estimates are largely in line with expectations, though visibility is limited. In this regard, the analyst noted intense competition in China for Starbucks from cheaper alternatives offered by Luckin (LKNCY) and Cotti.
AI Analyst Is Cautious on Starbucks Stock Ahead of Q4 Print
Interestingly, TipRanks’ AI Analyst has assigned a Neutral rating to SBUX stock with a price target of $88, indicating about 0.89% upside potential. TipRanks’ AI analyst’s rating is based on Starbucks’ solid international growth and strategic initiatives, which are weighed down by high leverage, declining U.S. sales, and a high valuation.
The AI analysis concluded that Starbucks’ ability to manage profitability and leverage will be important for future stability.
Options Traders Anticipate a Major Move on Starbucks’ Q4 Earnings
Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. If this sounds complicated, don’t worry, the Options tool does this for you.
Indeed, it currently says that options traders are expecting about a 7.65% move in either direction in SBUX stock in reaction to Q4 FY25 results.
Is SBUX Stock a Buy or Sell?
Currently, Wall Street has a Moderate Buy consensus rating on Starbucks stock based on 13 Buys, seven Holds, and one Sell recommendation. The average SBUX stock price target of $99.16 indicates a 13.7% upside potential from current levels.
