Starbucks' Turnaround Is Gaining Steam, But The Stock Isn't A Buy

Starbucks is executing a successful turnaround, with accelerating global comparable sales and expanding operating margins.

The company raised FY2026 guidance for comp. sales growth and EPS, reflecting robust business momentum and strategic execution.

Cost efficiency initiatives, including AI-driven software savings and a shift to higher-margin licensing, are supporting profitability improvements.

Despite operational strength, Starbucks' forward P/E of 41.49 is a 160% sector premium, justifying a reiterated hold rating due to limited upside.

Back in June 2025, I initiated coverage on Starbucks Corporation ( SBUX ). After seeing signs of shakiness in their financials, including sluggish revenue growth and declining EPS, I concluded that the stock was a