Starbucks Corporation (NASDAQ:SBUX) Just Reported Third-Quarter Earnings: Have Analysts Changed Their Mind On The Stock?

It's been a good week for Starbucks Corporation (NASDAQ:SBUX) shareholders, because the company has just released its latest third-quarter results, and the shares gained 2.4% to US$75.11. Starbucks reported in line with analyst predictions, delivering revenues of US$9.1b and statutory earnings per share of US$0.93, suggesting the business is executing well and in line with its plan. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Starbucks

Taking into account the latest results, the most recent consensus for Starbucks from 31 analysts is for revenues of US$39.3b in 2025. If met, it would imply a satisfactory 7.6% increase on its revenue over the past 12 months. Per-share earnings are expected to grow 13% to US$4.05. Before this earnings report, the analysts had been forecasting revenues of US$39.6b and earnings per share (EPS) of US$4.11 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The analysts reconfirmed their price target of US$87.25, showing that the business is executing well and in line with expectations. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Starbucks analyst has a price target of US$112 per share, while the most pessimistic values it at US$77.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Starbucks' revenue growth is expected to slow, with the forecast 6.1% annualised growth rate until the end of 2025 being well below the historical 9.2% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 9.6% annually. Factoring in the forecast slowdown in growth, it seems obvious that Starbucks is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$87.25, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Starbucks going out to 2026, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 2 warning signs for Starbucks (1 is potentially serious!) that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com