Starbucks (NASDAQ:SBUX) Trading Up 8.3% on Earnings Beat

Key Points

• Shares jumped 8.3% after Starbucks beat estimates with Q results of $0.50 EPS (vs. $0.44) and $9.53B revenue (vs. $9.09B), set FY2026 EPS guidance of $2.25–$2.45, and saw U.S. comps and analyst price targets rise on signs the turnaround is gaining traction.
• The company declared a quarterly dividend of $0.62 (2.3% yield), but investors should note a very high payout ratio (204.96%) alongside a low net margin, negative ROE on GAAP metrics and a rich P/E (~87), which temper the upside case.

Starbucks Corporation (NASDAQ:SBUX - Get Free Report) rose 8.3% on Wednesday following a better than expected earnings announcement. The company traded as high as $104.75 and last traded at $105.3990. Approximately 6,903,863 shares changed hands during mid-day trading, a decline of 20% from the average daily volume of 8,619,620 shares. The stock had previously closed at $97.28.

The coffee company reported $0.50 earnings per share for the quarter, beating the consensus estimate of $0.44 by $0.06. The firm had revenue of $9.53 billion for the quarter, compared to analyst estimates of $9.09 billion. Starbucks had a negative return on equity of 28.66% and a net margin of 3.63%.Starbucks's quarterly revenue was up 8.8% on a year-over-year basis. During the same period in the previous year, the firm earned $0.41 earnings per share. Starbucks has set its FY 2026 guidance at 2.250-2.450 EPS.

Starbucks Dividend Announcement

The company also recently declared a quarterly dividend, which will be paid on Friday, May 29th. Stockholders of record on Friday, May 15th will be issued a dividend of $0.62 per share. This represents a $2.48 annualized dividend and a dividend yield of 2.3%. The ex-dividend date is Friday, May 15th. Starbucks's payout ratio is currently 204.96%.

Key Stories Impacting Starbucks

Here are the key news stories impacting Starbucks this week:

• Positive Sentiment: Q2 results beat expectations — revenue of ~$9.5B and EPS $0.50, U.S. comparable‑store sales up ~6.2%, and management raised FY26 EPS and comp guidance, signaling the turnaround is gaining traction. Starbucks tops quarterly sales estimates as CEO's turnaround gains momentum
• Positive Sentiment: Analysts bumped targets and reiterated buys after the print — Robert W. Baird to $117, BTIG to $115 and other firms lifting outlooks, providing fresh upside from current levels. Analysts raise price targets on Starbucks
• Neutral Sentiment: CEO Brian Niccol and coverage emphasize that the “turn in the turnaround” is driven by service, store experience and product innovation — a multi‑year strategy that appears to be resonating with U.S. traffic. ‘A little touch of luxury, it goes a long way’: Starbucks CEO sees the turn in the turnaround as human touch sings
• Neutral Sentiment: Product expansion (e.g., Energy Refreshers, more customizable, non‑coffee options) supports revenue diversification but is still early in contribution. Your morning coffee is becoming optional at Starbucks
• Negative Sentiment: Management flagged higher gas and utility costs as a near‑term headwind; margins remain under scrutiny despite operating‑leverage improvements. Starbucks Reports Strong Store Traffic and Rise in Quarterly Sales
• Negative Sentiment: Competitive pressure — fast‑food rivals (e.g., McDonald’s) are expanding beverage menus, which could limit pricing/promotion power over time. McDonald's takes aim at Starbucks with new drinks menu
• Negative Sentiment: Valuation and fundamentals still give some investors pause — SBUX trades at a high P/E and shows a low net margin / negative ROE on GAAP metrics, so upside is being weighed against execution risk. Starbucks press release and financials

Analyst Upgrades and Downgrades

A number of analysts have issued reports on SBUX shares. Jefferies Financial Group upgraded shares of Starbucks from an "underperform" rating to a "hold" rating in a research note on Tuesday. Royal Bank Of Canada restated a "sector perform" rating and set a $110.00 price target (up from $105.00) on shares of Starbucks in a report on Wednesday. Dbs Bank raised shares of Starbucks from a "strong sell" rating to a "moderate sell" rating in a research note on Friday, March 20th. Deutsche Bank Aktiengesellschaft reiterated a "buy" rating and issued a $113.00 price objective on shares of Starbucks in a report on Thursday, January 29th. Finally, Robert W. Baird increased their target price on shares of Starbucks from $112.00 to $117.00 and gave the stock an "outperform" rating in a research report on Wednesday. Sixteen investment analysts have rated the stock with a Buy rating, thirteen have assigned a Hold rating and one has given a Sell rating to the company. Based on data from MarketBeat, the stock has a consensus rating of "Moderate Buy" and an average target price of $107.39.

Insider Transactions at Starbucks

In other news, EVP Sara Kelly sold 2,500 shares of the firm's stock in a transaction dated Thursday, March 5th. The stock was sold at an average price of $97.12, for a total value of $242,800.00. Following the sale, the executive vice president directly owned 59,609 shares of the company's stock, valued at approximately $5,789,226.08. This trade represents a 4.03% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Also, CEO Brady Brewer sold 588 shares of Starbucks stock in a transaction dated Friday, April 17th. The stock was sold at an average price of $100.00, for a total value of $58,800.00. Following the completion of the transaction, the chief executive officer owned 83,788 shares in the company, valued at $8,378,800. The trade was a 0.70% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 6,958 shares of company stock valued at $667,464 over the last 90 days. Corporate insiders own 0.03% of the company's stock.

Institutional Inflows and Outflows

A number of large investors have recently modified their holdings of SBUX. Nordea Investment Management AB raised its holdings in shares of Starbucks by 3.2% in the 3rd quarter. Nordea Investment Management AB now owns 433,112 shares of the coffee company's stock worth $36,576,000 after buying an additional 13,262 shares in the last quarter. Providence Capital Advisors LLC acquired a new stake in Starbucks in the 3rd quarter valued at $6,099,000. Asset Management One Co. Ltd. grew its position in Starbucks by 3.1% in the third quarter. Asset Management One Co. Ltd. now owns 548,768 shares of the coffee company's stock valued at $46,426,000 after acquiring an additional 16,428 shares during the period. Allstate Corp acquired a new position in Starbucks during the third quarter worth $3,491,000. Finally, Vanguard Group Inc. lifted its holdings in shares of Starbucks by 0.5% during the third quarter. Vanguard Group Inc. now owns 113,438,902 shares of the coffee company's stock valued at $9,596,931,000 after acquiring an additional 577,279 shares during the period. 72.29% of the stock is currently owned by institutional investors and hedge funds.

Starbucks Stock Performance

The company's 50 day moving average price is $96.15 and its 200 day moving average price is $90.75. The company has a market cap of $120.80 billion, a price-to-earnings ratio of 87.05, a P/E/G ratio of 2.08 and a beta of 0.95.

About Starbucks

Starbucks Corporation is a global coffeehouse chain and roaster that operates, licenses and franchises coffee shops and related retail businesses. Founded in Seattle, Washington in 1971 by Jerry Baldwin, Zev Siegl and Gordon Bowker, the company grew from a single store focused on whole-bean coffee and equipment into a broad consumer-facing brand. Howard Schultz, who joined the company later and served in senior leadership roles, is widely credited with transforming Starbucks into a mass-market specialty coffee retailer and expanding its footprint internationally.

Starbucks' core activities center on the retail sale of hot and cold specialty beverages, whole-bean and packaged coffees, teas and ready-to-drink products, along with complementary food items and merchandise such as mugs and brewing equipment.

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