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Starbucks Gets a Jolt After Earnings, But Will the Buzz Last?
Author: Chris Markoch. Article Posted: 1/30/2026.
In Brief
- Starbucks stock jumped after earnings, but gains faded as valuation concerns resurfaced.
- Revenue growth is improving, yet margins remain under pressure from labor and coffee costs.
- With SBUX trading near overbought levels, investors may want to wait for a pullback.
Starbucks Corp. (NASDAQ: SBUX) stock briefly jumped about 5% after the company reported mixed earnings before the market opened on Jan. 28.
Starbucks posted revenue of $9.92 billion, beating the forecast of $9.62 billion. Earnings per share (EPS) came in at $0.56, missing estimates by $0.03.
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Despite the revenue beat, within an hour of the opening bell, SBUX stock gave up some of its gains and slipped below the psychologically important $100 level.
Heading into earnings, analyst sentiment was generally bullish; however, the consensus price target for SBUX stock was $103.19, suggesting the stock was priced for perfection.
Given the mixed results and the erratic price action, investors are asking whether analysts—and the market—agree with Starbucks' CEO, Brian Niccol, who described the company's turnaround plan as "on track."
Below, we'll examine Niccol's turnaround plan and consider how economic factors, such as input costs and the 2026 outlook, could affect the company going forward.
Getting Back to Its Roots
The core of Niccol's turnaround is a renewed focus on the traditional "coffeehouse experience." The strategy aims to reposition Starbucks as a destination for gathering, which should boost traffic and, ultimately, sales and earnings.
This emphasis on top-line growth ahead of margin expansion matches the current quarter, where management acknowledged continued pressure on margins and EPS.
Same-store sales rose 4% in the quarter, indicating the plan may be gaining traction. Starbucks also recorded its first comparable transaction growth in the U.S. in eight quarters. The company's viral "Bearista" cold cup likely provided a short-term lift to traffic and transactions last quarter.
That said, like most retail names, Starbucks is sensitive to labor costs and traffic patterns in the U.S. and China. Persistent headwinds in those areas could limit the company's recovery.
Consumers Shouldn't Expect Price Relief
Earnings from companies such as Kimberly-Clark (NYSE: KMB) show consumers are still searching for value. That may be harder to find at Starbucks, which positions itself as a premium brand.
Management said Starbucks is contending with higher input costs. Regardless of any Supreme Court decision about the IEFA tariffs imposed during the Trump administration, the underlying cost pressures are likely to persist.
Coffee prices — which climbed over the past two years — are unlikely to move sharply lower. Coffee futures in 2026 look structurally tight and volatile, with upside risk still outweighing downside, particularly for Arabica beans, which Starbucks uses.
SBUX Stock Flashing Overbought Signals
SBUX shares appear extended: the price sits near the upper Bollinger Band while the relative strength index (RSI) hovers around 70, a level often considered overbought by short‑term traders. Patient investors may prefer to wait for a pullback toward the middle Bollinger Band, roughly near the 20‑day moving average (around $91.24), where prior consolidations have formed.
That zone often acts as support and could present a more favorable risk‑reward entry versus chasing new highs. Investors might also consider scaling into positions gradually to manage volatility.
The Tough Comps May Be in the Past
Despite a challenging retail backdrop, Starbucks' gains in overall revenue and same-store sales suggest the company is reconnecting with customers.
The 2026 revenue and earnings outlook is also more constructive; if management meets that guidance, it could materially change the stock's trajectory.
Niccol is focusing on what he can control, and there is a case that he's playing his hand well. Continued store openings and digital innovations could help margins as the turnaround progresses. As a long-term holding, SBUX retains strong brand cachet and potential pricing power down the road.
Investors must decide how much they're willing to pay for that future. At more than 60x trailing earnings, the stock is expensive relative to its historical average and would still trade at a premium at an estimated forward P/E near 32x.
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