SBUX
The bull case is still brewing
Deutsche Bank isn’t backing away from Starbucks. The firm reiterated a Buy rating and kept its $114 price target, which is a polite way of saying: “We still think this coffee chain has legs.”
Why the optimism? Deutsche Bank says Starbucks looks set up for a solid second quarter, with U.S. same-store sales and earnings per share likely to come in ahead of the street’s expectations. In analyst-speak, that’s the kind of combo platter that can keep a stock percolating.
What’s driving the cheer?
The firm pointed to a few things doing the heavy lifting:
- improved operations
- labor investments
- product innovation
- better marketing
It now models 6% U.S. same-store sales growth for the quarter, which is not exactly “oops, we found growth in the back of the couch” territory.
The China wrinkle
There is one bit of espresso-fueled complexity: Deutsche Bank expects incremental Q2 earnings to get diluted later in the year because of Starbucks’ recently closed China joint venture. But the bank says that’s actually a sign the underlying business is healthier than it looks on the surface.
Translation: short-term margin wobble, long-term strategic caffeine shot.
Why you should care
Starbucks has already had a strong year, and analysts are increasingly framing it as a self-help story under CEO Brian Niccol. If U.S. sales keep improving and management sticks to its fiscal 2026 guidance, the stock may have room to keep grinding higher — even if the China story makes the path a little messy.
Big picture: this is less “coffee fad” and more “can a legacy brand still reinvent itself without burning the beans?” Investors are watching to see if Starbucks can keep the momentum going.