A Turnaround Is Brewing At Starbucks. Here’s Where It’ll End The Year
SBUX beat EPS estimates by 31%, raised FY26 guidance for the third consecutive time, and our $120.60 price target implies 16% upside.
MCD posts 2.5% comps and CMG reports flat growth, making Starbucks' 8% global comps the strongest growth story in QSR.
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Starbucks (NASDAQ:SBUX) is showing what a turnaround looks like when the model works. Global comps up 7.9%, an EPS beat of 30.79%, and a raised full-year guide have shifted the narrative from "show me" to "how much runway is left?"
Our 24/7 Wall St. price target for Starbucks is $120.60, implying 15.8% upside from the current $104.14. Our research framework rates shares buy with high confidence.
Starbucks has climbed 25.21% year to date and 15.02% over the past year. Shares sit roughly 3% off the 52-week high of $109.23 and well above the September 2025 low near $82.68.
The Q3 FY26 report on July 29, 2026 confirmed the turnaround. Non-GAAP EPS of $0.85 beat the $0.65 consensus, revenue reached $9.32 billion, and North America comps grew 8.1% with transactions up 4.5%. Non-GAAP operating margin expanded 430 basis points to 14.4%.
CEO Brian Niccol said "Our third quarter results are proof they do." Management raised FY26 non-GAAP EPS guidance to $2.55 to $2.65, the third upward revision this year.
Bulls have a clear path. If Q4 US comps hit management's 6.5%+ guide and margin expansion holds, FY27 EPS could push toward $3.25, and a 38x multiple gets shares to our bull-case $135.80 one-year target.
Channel Development grew 22% in Q3, the China joint venture with Boyu Capital shifted 7,991 stores to a higher-margin licensed model, and IEEPA tariff refunds provide tailwind.
Wolfe Research upgraded to Outperform with a $112 price target. BEA figures show food-services spending reached $1,538.3 billion in May 2026, the highest in the dataset.
Risks are concrete. Prediction-market signals imply a downside target of $91.48, and insider activity has skewed toward selling. Shareholders' equity remains negative at -$7.67 billion, restructuring charges hit $302.6 million in Q3, and the P/E of 64 leaves little room for comp deceleration.
Our bear case sees shares around $104.65 in a year, essentially flat. The elevated multiple reflects a business in early innings of earnings recovery, and negative book value reflects years of aggressive buybacks and dividends.
McDonald's trades at a P/E of 26 with operating margin near 45% and Q1 FY26 comps of 2.5%. Starbucks trades at nearly triple the multiple but delivers more than double the comp growth. That premium looks defensible while the turnaround accelerates.
Chipotle's Q2 FY26 comps came in at flat with restaurant-level margin compressing to 26%, and the stock sits near 52-week lows. Starbucks is now the faster-growing story in fast-casual/QSR, making our $120.60 target look reasonable.
The 24/7 Wall St. price target of $120.60 with 90% confidence and a buy rating reflects genuine earnings inflection backed by four consecutive quarters of accelerating comps.
The bull thesis strengthens if Q4 US comps confirm the 6.5%+ guide and margins hold. The thesis weakens if transaction growth stalls below 3% or coffee inflation resurges.
These projections assume Starbucks executes on the Back to Starbucks plan and the China licensed model scales as designed. Upside could come from faster Channel Development monetization; downside would trace to a consumer discretionary pullback.
Contact editorial@247wallst.com for any questions or corrections.