Starbucks (SBUX) Is Up 5.5% After Elliott Stake, China JV And Strike Fallout - Has The Bull Case Changed?

• In recent days, Starbucks has been in focus as activist investor Elliott Management built a stake, North American operations outperformed, workers staged the company’s largest U.S. barista strike, and a China joint venture with Boyu Capital was announced alongside a US$38.9 million Fair Workweek settlement in New York City.
• Together, these developments highlight how Starbucks is balancing shareholder pressure, labor relations, and expansion in China while executing a broad operational turnaround.
• Next, we’ll assess how Elliott Management’s involvement and the company’s operational reset could influence Starbucks’ existing investment narrative.

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Starbucks Investment Narrative Recap

To own Starbucks today, you need to believe that its brand, Rewards ecosystem, and store base can translate a complex turnaround into healthier traffic, margins, and earnings. The latest news around Elliott’s stake, North American strength, and the China joint venture does not fundamentally change the near term focus on improving comparable sales and stabilizing margins, but it does sharpen the biggest immediate risk: ongoing labor and cost pressures weighing on profitability.

The new joint venture with Boyu Capital in China is particularly relevant here, because it ties directly to Starbucks’ growth catalyst of expanding in key international markets while refining local execution. With Boyu owning up to 60% of the China retail business and Starbucks retaining the brand and licensing economics, this structure could support long term international growth even as the company works through short term margin and labor challenges elsewhere.

However, while the headline growth story may look intact, investors should also be aware that ongoing labor investments and a recent 450 basis point margin contraction could...

Read the full narrative on Starbucks (it's free!)

Starbucks’ narrative projects $45.5 billion revenue and $4.6 billion earnings by 2028. This requires 7.5% yearly revenue growth and an earnings increase of about $2.0 billion from $2.6 billion today.

Uncover how Starbucks' forecasts yield a $94.19 fair value, a 5% upside to its current price.

Exploring Other Perspectives

Fourteen members of the Simply Wall St Community currently see Starbucks’ fair value anywhere between about US$48 and US$110, underlining how far opinions can spread. As you weigh those views, remember that recent margin pressure from higher labor costs and a slower payoff from the Back to Starbucks strategy could meaningfully shape how the turnaround filters through to future results.

Explore 14 other fair value estimates on Starbucks - why the stock might be worth as much as 23% more than the current price!

Build Your Own Starbucks Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Starbucks research is our analysis highlighting 1 key reward and 5 important warning signs that could impact your investment decision.
• Our free Starbucks research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Starbucks' overall financial health at a glance.

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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.

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