SBUX
Starbucks Corporation$98.69
Sell
Target $58.24
Report: Mar 07, 2026Consumer Cyclical • Restaurants • Turnaround CandidateSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$98.69-41.0%
Rec: SellConviction: Low
Entry Target
N/A
N/A
Fair Value
$58.24
(41% below current)
Stop Loss
N/A
N/A
Position Size
None
Time Horizon
N/A
Key Metrics
Live Snapshot
Market Data
52 Week High$104.82
52 Week Low$75.50
Avg. 3 Month Volume9.26M
Efficiency
LTM Gross Margin68.1%
LTM EBITDA Margin12.1%
LTM EBIT Margin7.4%
LTM Operating Margin6.5%
LTM ROA4.2%
LTM ROE-17.2%
LTM ROIC6.7%
LTM ROCE12.9%
Capital Structure
Market Cap (MM)$102.1B
Enterprise Value (MM)$124.1B
Shares Outstanding1.14B
Total Debt (MM)$25.47B
Cash & Equivalents (MM)$3.41B
LTM Net Debt (MM)$22.06B
LTM Net Debt/EBITDA4.8x
Growth
TTM Rev. Growth4.3%
Last 3-Yr Rev. CAGR4.6%
Last 3-Yr EBITDA CAGR-16.2%
Last 3-Yr EPS CAGR-25.5%
Valuation
Street Target Price$104.00
LTM EV/Revenue3.3x
LTM EV/Gross Profit4.8x
LTM EV/EBIT44.3x
LTM EV/EBITDA27.1x
LTM P/E74.6x
LTM EV/FCF53.1x
LTM P/FCF43.7x
LTM P/TB3.3x
LTM P/B-12.2x
Dividend Yield2.7%
Payout Ratio204.2%
Executive SummarySituation: Current price is $98.69 versus fair value $58.24 (-41.0% expected return), and valuation confidence is stable. Debate: Bull case depends on China JV with Boyu closes spring 2026 deconsolidating 8,011 stores, converting to licensed model with 40% equity retained; addresses market concern on China overexposure (comps +7% Q1 but portfolio repositioning via 51 closures Q1 FY26)... Bear case centers on Liquidity crunch breaches fixed charge coverage covenant on 2025 facility if FY2026 Q2 margins stay below 8% amid 4.8x net debt/EBITDA and $2.4B maturities FY2026. Conclusion: Recommendation is Sell with no position, pending a materially better risk/reward setup.
Bull Case
New CEO Brian Niccol grew Chipotle stock 700% (2018-2024) via operational resets mirroring Back to Starbucks; $2B cost savings and China JV accretive 40bps to margins; transaction growth +3% FY2026 Q1 broad-based across rewards/non-rewards.
Bear Case
Margins collapsed 690bps to 6.5% TTM on labor/commodity pressures with $892M charges; negative equity -$8.4B and 4.8x net debt/EBITDA risk covenant breach; NLV $0.00/share as liabilities exceed assets.
Key Catalysts
Near-Term (0-6 months)Impact: High
China JV with Boyu closes spring 2026 deconsolidating 8,011 stores, converting to licensed model with 40% equity retained; addresses market...
Mid-Term (6-18 months)Impact: Critical
$2B cost savings program delivers 420bps margin lift by FY2026 H2 via procurement/G&A; counters skepticism on 6.9pt contraction from Green A...
Long-Term (18+ months)Impact: Moderate
Starbucks reports FY2026 Q1 results January 28 with 5% revenue growth and 4% global comps on +3% transactions, marking first positive inflec...
Primary Risks
Concern: High
Liquidity crunch breaches fixed charge coverage covenant on 2025 facility if FY2026 Q2 margins stay below 8% amid 4.8x net debt/EBITDA and $...
Concern: High
Transaction growth stalls below 3% FY2026 on Green Apron failure, driving revenue to 2% vs 4.3% TTM and perpetuating 6.5% margins.
Concern: Medium
Stewardship is adequate with board refresh (Marissa Mayer/Dambisa Moyo 2025 adds for tech/macro) and independent Comp Chair Ritch Allison (e...
Recent Activity
2025-04-30SEC Filing (8-K)
-5.66%Starbucks reports Q2 FY2025 results with $8.8 billion revenue, up 2% year-over-year
2025-03-08Market Movement
-5.02%Market/Sector Move -5.02%
2025-01-29SEC Filing (8-K)
+8.14%Starbucks reports Q1 FY2025 results with $9.4 billion revenue, flat to prior year
2024-08-13Analyst Target
+24.50%Firm: Piper Sandler Analyst: Brian Mullan Price Target: $103.00 Price When Posted: $95.90 Implied Upside: +7.4%
2024-05-01SEC Filing (8-K)
-15.88%Starbucks reports Q2 FY2024 results with $8.6 billion revenue, down 2% year-over-year
Valuation Table
9.8/10Decision Grade
Scenario Range
$2
Base
$88
Bull
$99