Here’s what Wall Street is saying about Starbucks ahead of earnings

Starbucks (SBUX) is scheduled to report results of its fiscal fourth quarter after the market close on October 29, with a conference call scheduled for 4:15 pm ET. What to watch for:

RESTRUCTURING: Last month, Starbucks said its board had approved a restructuring plan involving the closure of coffeehouses, and the further transformation of the company’s support organization, as part of the company’s ‘Back to Starbucks’ strategy. “The ‘Back to Starbucks’ strategy focuses on revitalizing coffeehouses and enhancing the customer experience,” the company said. “As part of this strategy, the company assessed its existing store portfolio with respect to both whether coffeehouses had a viable path to offering the physical environment consistent with the brand and a clear path to financial performance. It will close those coffeehouses that do not meet these criteria. As the company works to build a stronger and more resilient Starbucks and prioritizes investment closer to the coffeehouse and the customer, the company is also further restructuring its support organization. The company expects that a majority of the store closures will be completed by the end of this fiscal year. The company estimates that it will incur approximately $1 billion related to the store closures, support organization transformation, and other restructuring activities, with 90% of the expenses attributable to the North America business. The company further expects that a significant portion of these charges will be incurred in fiscal year 2025. Of the total restructuring charges incurred, the company estimates a breakdown of approximately $150 million related to employee separation benefits, approximately $400 million related to the disposal and impairment of company-operated store assets, and approximately $450 million primarily associated with accelerated amortization of ROU lease assets and other lease costs due to store closures prior to the end of contractual lease terms. These restructuring charges will result in estimated non-cash charges of approximately $400 million related to asset impairment and disposal with the remaining estimated costs being future cash expenditures of approximately $600 million related to employee separation benefits and lease exit costs.”

Following the announcement, BTIG reiterated a Buy rating and $105 price target on the shares, but acknowledged the turnaround here is taking longer than it initially anticipated. The firm said at the time that it was encouraged by the longer-tail portfolio restructuring and further cost reductions, and it eagerly awaits a return to positive transaction counts in the U.S. as the ultimate catalyst.

BOFA: On Friday, BofA analyst Sara Senatore raised the firm’s price target on Starbucks to $117 from $114 and kept a Buy rating on the shares. After a Q2 earnings season that “seemed to hit the market like a bucket of cold water,” investor enthusiasm for restaurants is “decidedly absent,” said the analyst, who has also grown more cautious given the widening of macro pressures beyond the low-income cohort. For stocks trading at the low end of their historical valuation ranges, the firm expects the market to respond favorably to signs that earnings are intact, the analyst added in a group preview.

BARCLAYS: Meanwhile, Barclays cut the firm’s price target on Starbucks to $95 from $115 and maintained an Overweight rating on the shares as part of a Q3 preview for the restaurant group. Comparable sales were “choppy” in the quarter, slowing in September despite an uptick in value offers, with fast casual most impacted, the analyst tells investors in a research note. The firm adds that food inflation spiked for select items, with some restaurants reverting to price despite ongoing traffic weakness.

UBS: UBS also cut the firm’s price target on Starbucks to $94 from $100 and kept a Neutral rating on the shares. The firm expects “limited” progress against “Back to Starbucks” strategic initiatives, with Q4 sales trends likely still challenged given the difficult industry environment, while margins and earnings likely remain pressured, the analyst told investors in a research note. The turnaround plan should support a gradual sales recovery over time, with a strong leadership team and appropriate strategies across operations, marketing, product innovation and customer experience enhancements, the firm said.

MORGAN STANLEY: Additionally, Morgan Stanley raised the firm’s price target on Starbucks to $105 from $103 and maintained an Overweight rating on the shares. Fiscal Q4 is unlikely to beat expectations or “mark a major step forward” yet, but this probably was not the baseline expectation anyway, the analyst tells investors in a preview. The firm models North American same-store sales to be down 1% and lowered its EPS forecast to 56c, versus the Street at 57c, the analyst noted.

WELLS: Conversely, Wells Fargo lowered the firm’s price target on Starbucks to $100 from $105 and reaffirmed an Overweight rating on the shares. The firm notes Q2 EPS was a disaster, demand has slowed since, and the group can’t shake a narrative of too much price, low-income exposure and “race to the bottom” promo. But the short restaurant call is crowded, Q3 misses are priced in, and estimates are already moving lower. Starting to look at 2026, sentiment should improve into easy first half of the year compares and potential stimulus benefits, Wells says. Bad narrative aside, the firm takes the contrarian long side of the trade into Q3.