Starbucks (NASDAQ:) faced challenges in Q3 but remains optimistic about regaining traction. Analysts have varying responses, with solid support for the stock above $72.50. An FOMC rate cut later this year could boost the stock’s growth in 2025.
Starbucks’ growth struggles continue, but signs point to a potential return to growth soon. While Q3 results were mixed, the company anticipates sequential improvements that could accelerate, reaffirming guidance for the year. Investors should take note of the increasing price action in SBUX shares, signaling a possible reversal in the near future. If the FOMC implements rate cuts, this reversal could gain momentum, potentially pushing the stock price back to recent highs by the end of 2025, translating to a 37.5% gain with limited downside risk.
Despite some downside risk, Starbucks stocks show substantial support around $72.50, with analysts setting targets above this level. While the response to the Q3 report is mixed, new targets are narrowing below the broader consensus but still above $72.50, offering potential upside. The stock may retreat to retest support, triggering a buying frenzy above $72.50. Consensus targets suggest a 20% upside, which may materialize after the analysts’ revisions trend higher, possibly post Q4 report in early next year.
Analysis Breakdown:
Starbucks faced challenges in Q3 but is optimistic about regaining traction, with potential for growth in 2025. Analysts have mixed responses but show solid support for the stock above $72.50. An FOMC rate cut could further boost the stock later this year.
The company reported $9.1 billion in net revenue for Q3, slightly below consensus, with a 3% decline in global comps due to a 5% drop in transactions. Margins contracted by 60 basis points, but earnings remained strong at $0.93. CEO’s positive outlook on business conditions and growth strategies indicate a potential turnaround. The stock is currently in rebound mode, showing support at critical levels but faces resistance at $82.50. Failure to break above this level may lead to downside risk, with potential price targets around $76.50 or lower.