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Starbucks Gets a Jolt After Earnings, But Will the Buzz Last?
Submitted by Chris Markoch. First Published: 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 results before the market opened on Jan. 28.
Starbucks posted revenue of $9.92 billion, ahead of the forecast of $9.62 billion. Earnings per share (EPS) were $0.56, missing estimates by $0.03.
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Despite the revenue beat, within an hour of the opening bell SBUX stock had surrendered some 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 limited upside from then-current levels.
Given the mixed results and the stock's choppy price action, investors are asking whether analysts—and the market—agree with CEO Brian Niccol, who described the company's turnaround plan as "on track."
Below, we'll examine Niccol's turnaround strategy and consider how economic factors, such as input costs and the 2026 outlook, could influence the company going forward.
Getting Back to Its Roots
The core of Niccol's plan is to revive the "coffeehouse experience." The strategy aims to return Starbucks to its roots as a destination for gathering, which should drive traffic and sales volume and, eventually, improve earnings.
The notion that revenue growth will precede margin recovery aligns with the latest quarter; the company noted margins and EPS remain pressured for now.
Same-store sales rose 4% in the quarter, and Starbucks recorded its first comparable transaction growth in the United States in eight quarters. The company's viral "Bearista" cold cup likely provided a short-term sales lift this quarter as well.
That said, like most retail stocks, Starbucks is sensitive to labor costs and traffic trends in both the United States 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) suggest consumers remain value-conscious. That mentality may make it hard for Starbucks to offer much price relief given its premium positioning.
Management acknowledged higher input costs in the earnings report. Regardless of how the Supreme Court rules on the IEFA tariffs imposed during the prior administration, the underlying cost pressures are likely to persist.
On the commodity front, coffee prices — which have risen over the past two years — may not spike sharply higher, but they are also unlikely to decline substantially. Coffee futures for 2026 look structurally tight and volatile, with upside risk outweighing downside risk, particularly for Arabica beans used by Starbucks.
SBUX Stock Flashing Overbought Signals
SBUX shares appear extended: the price is near the upper Bollinger Band and the relative strength index (RSI) hovers around 70, a level many short-term traders view as overbought. For patient investors, a more attractive entry could come after a pullback toward the middle Bollinger Band — roughly the 20‑day moving average (around $91.24) — where prior consolidations formed.
That zone often acts as support and could present a better risk‑reward entry than chasing new highs. Investors may also prefer to scale in gradually rather than buy a full position at once 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 indicate its initiatives are resonating with customers.
Moreover, the company's 2026 revenue and earnings outlook appears more favorable, and if that outlook is realized it could provide meaningful support to SBUX shares.
Niccol is focusing on what he can control, and there is a case that he is executing the turnaround reasonably well. Continued store openings and digital innovations could bolster margin expansion as the recovery progresses. As a long-term holding, SBUX still benefits from strong brand cachet and potential pricing power down the road.
Investors must decide what they are willing to pay for SBUX today. Trading at more than 60x earnings, the stock looks expensive relative to its historical average and would remain somewhat rich even on a forward P/E near the low‑30s.
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