On Monday, Piper Sandler adjusted the share price target for Starbucks Corporation (NASDAQ:SBUX), bringing it down to $85 from the previous $88, while keeping a Neutral rating on the stock. The revision follows Starbucks' recent announcement of results and forecasts that fell short of expectations.
The investment firm's commentary highlighted the dual aspects of the current discussion among investors regarding Starbucks. The first aspect focuses on what might be a realistic estimate for Starbucks' Fiscal 2025 adjusted earnings per share (EPS) and the appropriate multiple to apply to that estimate. According to Piper Sandler, the stock is currently trading at around 19 times the buy-side expectations, which are lower than the consensus.
The second aspect of the conversation pertains to the Starbucks management team's ability to forecast, strategize, and execute plans. The firm noted that while it's not pleasant to discuss, acknowledging management quality is essential as it remains a central topic in investor debates.
Piper Sandler's commentary comes in the wake of Starbucks' disappointing performance and outlook shared earlier in the week. The report indicates that investor confidence may be wavering due to recent company results and concerns over management's performance.
The investment firm's analysis suggests that the market is taking a cautious stance on Starbucks, factoring in both the company's financial projections and the effectiveness of its leadership. The new price target reflects the market's adjusted expectations following the latest financial data released by Starbucks.
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