Bernstein Boosts Starbucks Outlook Following Strong Sales Growth

Bernstein's Positive Rating#

Bernstein SocGen Group has reaffirmed an Outperform rating for Starbucks (NASDAQ:SBUX) and set a price target of $100.00 following the company's impressive second-quarter fiscal 2026 results. Currently, Starbucks shares are trading at $97.28, with a market capitalization of $110.8 billion. However, some analyses suggest that the stock may be overvalued compared to its Fair Value estimate. The company has a price-to-earnings (P/E) ratio of 81, indicating that investors are willing to pay a premium for its shares compared to others in the restaurant sector.

Strong Sales Performance#

Starbucks reported a global comparable store sales increase of 6.2%, with U.S. same-store sales rising by 7.1%. This growth surpassed analyst expectations, which were around 3.7% for global sales and over 6% for U.S. sales. The increase is attributed to operational improvements, digital initiatives, and innovative menu offerings. Year-to-date, Starbucks shares have returned 16%, and nine analysts have raised their earnings estimates for the upcoming period.

Operational Insights#

Despite the positive sales figures, only 60% of Starbucks locations are currently meeting operational standards. The company has recently relaunched its energy platform and loyalty program. Additionally, new menu items like cold foams and protein modifiers are gaining popularity. Starbucks plans to begin testing food menus for afternoon hours soon, and 300 out of 8,000 stores have completed renovations.

Updated Fiscal Guidance#

Management has raised its fiscal 2026 guidance from 3% to 5%. The U.S. same-store sales growth of 7.1% was driven by over 4 percentage points of growth in the number of transactions and an average ticket increase of about 3%. Internationally, same-store sales grew by 2.6%, marking the first growth in all top 10 markets in nine quarters.

Starbucks' recent financial results have exceeded analyst expectations, with earnings per share (EPS) of $0.50 compared to the projected $0.42, and revenue of $9.5 billion, surpassing the anticipated $9.12 billion. This strong performance has garnered positive attention from investors and analysts alike.